Greedflation
Version 1.0.0 · Updated 2026-07-30
CORE DEFINITION
Firms exploit the widespread expectation of inflation as an excuse to raise prices more than the increase in costs, thereby obtaining excess profits.
SCAFFOLDING EFFECT
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Fishing in troubled waters. When everyone is talking about 'price increases', firms will take the opportunity to raise prices a bit more. Consumers, because they are psychologically prepared (expected inflation), are less sensitive. This is using a macro narrative to cover up micro-level exploitation.
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Greedflation refers to the phenomenon where, during periods of high inflation, firms use rising costs as a cover to increase prices more than the cost increase, thereby boosting profits. It attributes part of inflation to market power rather than pure supply shocks. It emphasizes the role of firms' pricing power in driving inflation.
MINIMUM ACTION
In progress 0/1Practice this model in one real situation:
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Source support: Explicit
- en.wikipedia.orghttps://en.wikipedia.org/wiki/2021%E2%80%932023_inflation_surgeverified
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