The Guardian reported,A new report claims “resounding evidence” shows that high corporate profits are a main driver of ongoing inflation, and companies continue to keep prices high even as their inflationary costs drop.The report, compiled by the progressive Groundwork Collaborative think tank, found corporate profits accounted for about 53% of inflation during last year’s second and third quarters. Profits drove just 11% of price growth in the 40 years prior to the pandemic, according to the report.Is this true? Unraveling this mysterious relationship between corporate profit and inflation is easy once we clearly define what profit and inflation are. This allegation that corporate profits accounted for 53 percent of inflation is a result of using wrong definitions and reasoning by
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