Process
Status Items Output None Questions None Claims None Highlights Done See section below
Highlights
id547729731
a plausibly external shock — like a pandemic, a war, or an environment of generally rising prices — can make it hard for consumers to tell which price increases are reasonable and which are price gouging, thus weakening the moral economy constraint.
id547729327
no one is arguing that “greed” suddenly shot up. Rather, firms with preexisting, but unexercised, market power saw the sudden softening of the moral economy constraint as an opportunity to exercise latent market power that they had all along. Enough firms do this, and it can result in market power- and profit-driven inflation, or what economists Isabella Weber and Evan Wasner call “sellers’ inflation.” Moreover, once prices settle at the new, higher level, firms can tacitly collude to keep them there — for example, through public communications on earnings calls
id547729546
prices and inflation are not mechanical forces of nature, but always the outcome of multiple social forces.