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Some progressives have frequently blamed corporate greed for fueling the high cost of living that Americans are fed up with.
Yet new research from the Federal Reserve Bank of San Francisco casts doubt on the greedflation theory.
Economists at the SF Fed found that corporate price gouging was not a primary catalyst for the inflation surge of 2021 to 2022.
The Fed researchers did find that some companies exercised pricing power by raising prices above their production costs – a gap known as markups.
For instance, markups spiked for gasoline, cars and other goods in 2021. Likewise, there were increased markups for repair, general merchandise, laundry, personal care and other services, according to the Fed.