• JPAKx4@lemmy.blahaj.zone
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    7 months ago

    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.

    • CaptainSpaceman@lemmy.world
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      7 months ago

      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.

      • HappycamperNZ@lemmy.world
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        7 months ago

        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.

        • Knock_Knock_Lemmy_In@lemmy.world
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          7 months ago

          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.)

          • HappycamperNZ@lemmy.world
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            7 months ago

            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.

            • Knock_Knock_Lemmy_In@lemmy.world
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              7 months ago

              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.

              • HappycamperNZ@lemmy.world
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                7 months ago

                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.

                • Knock_Knock_Lemmy_In@lemmy.world
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                  7 months ago

                  The supply demand is for a single item

                  Exactly, and the single item in this case is the US dollar. Increase the (money) supply and it’s value goes down relative to everything else.

                  Inflation is a function of the fiat currency it references, not the goods that currency buys.

          • utopianfiat@lemmy.world
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            7 months ago

            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.

            • Knock_Knock_Lemmy_In@lemmy.world
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              7 months ago

              Inflation is not growth in the money supply,

              It is caused by this.

              money supply is one way that inflation can occur,

              And the other is a reduction in quantity of goods and services.

              but the basis of inflation is the increase in nominal costs of everyday prices.

              No, that is the result of inflation, not the basis (reason).

              • utopianfiat@lemmy.world
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                7 months ago

                It is caused by this

                And supply shock, and wage growth, and tons of other things. You literally said “inflation is an increase in the money supply”

                • Knock_Knock_Lemmy_In@lemmy.world
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                  7 months ago

                  Again, you are giving examples of price changes in specific goods, not inflation.

                  Supply shock - is specific to the asset experiencing the shock. This is not inflation.

                  Wage growth - the specific asset here is human capital.

                  Inflation is when all prices increase, or equivalently, when the buying power of the fiat currency reduces. I.e. when more money exists than there was before.

    • dislocate_expansion@reddthat.comB
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      7 months ago

      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

    • frezik@midwest.social
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      7 months ago

      That just means price gouging is a cause of inflation. It would be measured as an increase in prices either way.

    • afraid_of_zombies@lemmy.world
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      7 months ago

      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.