The “Theory” of “Greedflation” Is Rank Nonsense

Source: Cafe Hayek
by Don Boudreaux

“It’s true that there’s no evidence that inflation is being caused by rising wages and input prices pushing output prices upward. But there’s also no evidence that today’s inflation is fueled by sellers’ intensifying greed pushing output prices upward. No matter how intense is sellers’ ‘greed’ for higher profits, consumers cannot pay higher prices across the board without additional money to do so — additional money that happens to have been injected into the economy by the Federal Reserve just as the rate of inflation accelerated. Sellers are raising prices across the board only because the Fed, by increasing the money supply, is giving consumers excessive amounts of money to spend.” (06/19/23)