I know you’re probably joking, but for anyone interested:
Inflation is an increase of pricing for goods and services, and usually increases 1-3% per year.
Price gouging is the grocery store going “inflation has been terrible, so 30% increases store wide is necessary” when the real inflation over the past 3 years is actually 6-7% total. Now this isn’t necessarily just on the grocery store, the suppliers could have pulled the inflation card or the supplier’s suppliers, etc.
You can check which company is price gouging by seeing if they are having record breaking profits for the year. Sometimes companies actually do what it takes to make profit, but something like a grocery store should just be consistent and only increase with population or cost saving measures.
I can only speak for what I see but I know the prices I pay for parts have gone up about 25% the past two years. Now I have checked to see what my employer is doing with that fact but I highly doubt we are just eating the cost.
Yes, they are two different concepts but both can be true at the same time. For example, corn and lumber prices in the commodity market sky rocketed during the pandemic, those prices eventually hit the consumer
Are any grocers not price gouging? If the entire market is doing it, then whether its gouging or not is itrrelvant. To the consumer and to the Fed, it is inflation.
Inflation is the general price level of everything.
The gouges are those who supply inelastic goods i.e ones when demand drops only a little when prices go up, I.e essentials and addictive items. Elastic goods don’t get gouging as much because people can choose to not buy them, and these sit closer to the level of inflation.
Inflation is not growth in the money supply, money supply is one way that inflation can occur, but the basis of inflation is the increase in nominal costs of everyday prices.
That is a very simplistic way of looking at inflation. When you consider both okuns law and the Philip’s curve, and the relationship between them anything that changes GDP or unemployment rates will affect inflation. Tech changes, foreign demand on products, government changes, interest rates (the most common lever), pay rates - it all feeds into inflation in some way or another. And yes, government increased money supply is also a big inflation driver.
Calling it a symptoms is like calling dying a symptom of car crashes, when there is a multitude of other ways it happens.
The supply demand is for a single item. It doesn’t work in the wider economy because as one good gets more expensive people switch to similar goods that didn’t increase - price increases, q demanded falls, customers swaps to a mirror good or don’t buy at all.
Changes in technology is a supply side, not demand side. On foreign demand im referring to changes in exchange rates that can affect GDP and associated inflation pressures.
Price gouging in not inflation.
Whats the difference?
I know you’re probably joking, but for anyone interested: Inflation is an increase of pricing for goods and services, and usually increases 1-3% per year.
Price gouging is the grocery store going “inflation has been terrible, so 30% increases store wide is necessary” when the real inflation over the past 3 years is actually 6-7% total. Now this isn’t necessarily just on the grocery store, the suppliers could have pulled the inflation card or the supplier’s suppliers, etc.
You can check which company is price gouging by seeing if they are having record breaking profits for the year. Sometimes companies actually do what it takes to make profit, but something like a grocery store should just be consistent and only increase with population or cost saving measures.
I can only speak for what I see but I know the prices I pay for parts have gone up about 25% the past two years. Now I have checked to see what my employer is doing with that fact but I highly doubt we are just eating the cost.
Yes, they are two different concepts but both can be true at the same time. For example, corn and lumber prices in the commodity market sky rocketed during the pandemic, those prices eventually hit the consumer
Are any grocers not price gouging? If the entire market is doing it, then whether its gouging or not is itrrelvant. To the consumer and to the Fed, it is inflation.
Inflation is the general price level of everything.
The gouges are those who supply inelastic goods i.e ones when demand drops only a little when prices go up, I.e essentials and addictive items. Elastic goods don’t get gouging as much because people can choose to not buy them, and these sit closer to the level of inflation.
The symptom of inflation is the general increase in price of everything.
Inflation is growth in the monetary supply.
(Also velocity of money but that I’d never discussed, let alone measured.)
And the money supply increased enormously during the pandemic. So it’s real inflation.
Inflation is not growth in the money supply, money supply is one way that inflation can occur, but the basis of inflation is the increase in nominal costs of everyday prices.
It is caused by this.
And the other is a reduction in quantity of goods and services.
No, that is the result of inflation, not the basis (reason).
And supply shock, and wage growth, and tons of other things. You literally said “inflation is an increase in the money supply”
Everyone in this thread is talking about price inflation, not monetary inflation.
Price inflation is the visible outcome of monetary inflation.
That is a very simplistic way of looking at inflation. When you consider both okuns law and the Philip’s curve, and the relationship between them anything that changes GDP or unemployment rates will affect inflation. Tech changes, foreign demand on products, government changes, interest rates (the most common lever), pay rates - it all feeds into inflation in some way or another. And yes, government increased money supply is also a big inflation driver.
Calling it a symptoms is like calling dying a symptom of car crashes, when there is a multitude of other ways it happens.
Price increase is the symptom of inflation because it happens after the cause.
The reason you list interest rates is because it is lever to control money supply.
Everything else you list is demand, what money is spent on, and subject to normal supply and demand pricing.
Just because a price changes, doesn’t mean it’s inflation causing it.
You’re getting your models confused.
The supply demand is for a single item. It doesn’t work in the wider economy because as one good gets more expensive people switch to similar goods that didn’t increase - price increases, q demanded falls, customers swaps to a mirror good or don’t buy at all.
Changes in technology is a supply side, not demand side. On foreign demand im referring to changes in exchange rates that can affect GDP and associated inflation pressures.
That just means price gouging is a cause of inflation. It would be measured as an increase in prices either way.
The “real” inflation isn’t something separate from price increases. Inflation is price increases.