The worst inflation in four decades has proved quite the ride for consumers over the past two years, and recently, it’s even helped the unthinkable become increasingly mainstream. Some economists are asking: Are consumers actually getting ripped off? This once fringe economic hypothesis has captured headlines more and more this year amid persistent inflation, even if it usually goes by another name. After years of being labeled a conspiracy theory, some economists believe that “greedflation” or, to put it the way an early prognosticator defined it, “profit-led inflation,” is to blame for at least part of the recent rise in consumer prices.
The theory that corporations used the war and pandemic as an excuse to hike their profit margins, for a time supported only by progressive economists, has gained backing from the likes of Lael Brainard, a former Fed vice chair and current director of Joe Biden’s National Economic Council, and Albert Edwards, a global strategist at French investment bank Société Générale.
