Profit Inflation: Mapping the debate

Methods to map the discourse: Chronology and Selective Zoom-Ins

To understand the concept of profit inflation as well as the impact of Isabella Weber’s research in recent years, it can be helpful to reconstruct the shift in discourse since 2021. This dossier therefore approaches the topic of profit inflation in a chronological way. It aims not only to collect the most important publications on profit inflation but also intends to map out the development of the discourse and the different positions within the debate. Having discussed the complexity of the subject above, it is important to note that this reconstruction cannot, and does not claim to, capture the global inflation debate, or even the debate surrounding profit inflation, in its entirety. Rather the reconstruction zooms in on specific aspects of the debate more than others. These are chosen to illuminate specific aspects of the discussion surrounding profit inflation and readers are encouraged to use them as a starting point for further investigations.

The dossier starts with a narration of the two main inflation stories that dominated the New-Keynesian debate in 2021 up to the disruption of the discourse that was brought about by Isabella Weber’s Guardian article in December 2021. This part of the dossier is mainly concerned with retracing the beginning of Weber’s journey from heretic to well within the mainstream. All publications are newspaper articles, as this is the realm in which the debate began.

The second part of the dossier, from Josh Bivens' blog article in April 2022 to Isabella Weber’s and Evan Wasner’s paper on sellers’ inflation in February 2023, assembles the publications that led to the slow spread of the idea of profit inflation in academic and policy circles. Most of these publications have earned their place in this part of the collection, because they have advanced the theoretical understanding and modeling of profit inflation. However, there are also some publications from central banks or other politically relevant institutions that have been included mainly for their discursive significance. This applies, for example, to the speech by Isabel Schnabel, in which a member of the Executive Board of the European Central Bank (ECB) acknowledged the existence of profit inflation for the first time. Since controlling inflation has long been a central bank mandate, it was of crucial importance for the development of the profit inflation discourse that central banks gradually began to talk about it. There are various types of publications in this section, the most common one being a working paper, such as Weber’s first paper on inflation in times of overlapping emergencies.

The third section deals with the debate within heterodox economics that was triggered by Marc Lavoie's critique of profit inflation. While the number of publications increased slowly but steadily until Weber and Wasner's paper in sellers’ inflation, their growth naturally accelerated quite quickly after their paper on sellers’ inflation. For this reason, the collection of contents gets a little more selective in this part of the dossier. It solely focuses on the heterodox controversy on profit inflation that has been opened up by Marc Lavoie and the subsequent clarification of the term profit inflation by various authors. The dossier concludes with Weber’s and van’t Klooster’s report on closing the inflation governance gap in the EU, not only because this is one of Weber’s more recent publications on the subject, but also to include a publication that explicitly focuses on the political consequences of what Weber calls shockflation in this publication.

Last but not least - some disclaimers. First, a note on the term profit inflation itself: ‘Profit inflation’ is not necessarily the term that most of the authors use when discussing the phenomenon of profit inflation. Admittedly, the term ‘Sellers’ inflation’, coined by Weber and Wasner in reference to Lerner (1958), has probably been the most widely used term in the discussion on profit inflation since they published their paper. But there is still no academic or public consensus on one singular term for the phenomenon, which of course reflects the relative novelty of the debate. This is featured prominently in the third part of the dossier, which mostly revolves around the question of what the term profit inflation can reasonably be used for and suggestions for different definitions and terms. In contrast, the earlier publications use almost no specific terms, but rather formulate concrete questions concerning the contribution of profits to inflation. The term ‘profit inflation’ has been chosen as a conceptual framework for this dossier, as it is the broadest one and is therefore also used in all instances where the authors do not offer a more specific term. To provide a better overview of the use of the different terms, a category “Central term/question” has been added for each publication. There you can see which specific term the authors of this publication use, if any, and if not, what the central question of this publication is in relation to profit inflation.

Second, it is important to note that most of the publications included here are not (yet) peer-reviewed journal articles but rather working papers, policy papers, blog posts or newspaper articles, some of which have been published by political institutions like think tanks or central banks. These are not only inherently political publications, but also preliminary ones reflecting the evolving nature of the debate at this early stage.

Third, also keep in mind that this dossier is not an academic review of the profit inflation debate, but an educational material. It aims to make scientific research accessible to students and other non-specialists and provide a starting point for further research. While some key publications (especially Weber's key contributions) were reviewed more extensively, the largest part of the dossier aims to compress complex scientific argumentations in a paragraph or two.

1. The start of the discourse: Team Stagflation vs. Team Transitory vs. Team Profit Inflation

Even before inflation rose to new levels in late 2021 (and then exploded in the spring of 2022 with the Russian war in Ukraine) there had been warnings of incoming inflationary pressures in the US. In February 2021, US-American economist Larry Summers warned that Bidens covid-19 relief plan and the stimulus effect resulting from it would “set off inflationary pressures of a kind we have not seen in a generation, with consequences for the value of the dollar and financial stability” (Summers 2021). His argument is built upon the disproportion between the $1.9 trillion covid-19 relief plan and the size of the output gap: Summers argues that the stimulus is three times the size of the gap between the actual and potential output per month, with the former being $150 billion and the latter being $50 billion. He expands his argument by drawing a parallel to the Obama administration's fiscal stimulus in early 2009: He argues that the stimulus at that time was too small as it only “provided an incremental $30 billion to $40 billion a month during 2009 — an amount equal to about half the output shortfall.” (Summers 2021). After making a similar argument, looking at the relation between family income loss on the one side and benefit increases and tax credits on the other, he then proceeds to his warning about incoming inflationary pressures: Although Summers states that he does not want to undermine the plan for the stimulus package as a whole, he makes it clear that it must be accompanied by a rapid adjustment of fiscal and monetary policy to cope with the consequences of such a potential rise in inflation.

This roughly sums up one of the two arguments, around which the debate about inflation was revolving at that time. The other one was raised by Paul Krugman in his piece for The New York Times in march 2021. In contrast to Summers, he argued that if inflation were to rise as a result of the covid-19 stimulus, it was in fact no cause for concern: He argued that even though inflation was likely to rise as a result of the stimulus and a global supply shortage, this was most likely going to be a transitory phenomenon. Hence, according to Krugman, there was no need to panic about stagflation, as long as the rise in inflation did not manifest itself in high inflation expectations and businesses setting higher prices according to these expectations, ergo setting off the self perpetuating circle of inflation. Krugman's article at the time was of course mainly aimed at those using inflation as an argument against the government's plan for stimulating the economy. Nevertheless,  it laid the ground for a specific policy approach, which was based on policy restraint. This was grounded in the idea that if inflation was going to calm down by itself, if it was a transitory phenomenon, no action was needed.

The counterpart to this policy was pushed by Summers, who began to be celebrated as somewhat of a prophet, when inflation actually started to rise to new levels later in 2021: In a well established manner within the New-Keynesian mainstream, “Summers and like minded thinkers” (Carter 2023), e.g. Jason Furman, called upon the Federal Reserve for a strong rise in interest rates. This was meant to induce a massive layoff, an unemployment level strong enough to cool the overheating inflationary economy. By the summer of 2022 Summers was talking about unemployment rates between 5-10 percent (Carter 2023; Weismann 2021). When this was heavily criticized, Summers argued that it was not a direct call for raising unemployment but rather an estimation of what can be expected as a result of a functioning policy against mounting inflation (Weissmann 2021). Either way he was criticizing the Fed for underestimating the rate of unemployment necessary to bring down inflation.

These were pretty much the two teams which dominated the debate around inflation Isabella Weber pointed out herself, when she entered the debate: “Today economists are divided into two camps on the inflation question: team Transitory argues we ought not to worry about inflation since it will soon go away. Team Stagflation urges for fiscal restraint and a raise in interest rates.” (Weber 2021). In her Guardian article in December 2021 Weber suggested a third option: To bring down inflation, the government could also strategically target the specific prices which were responsible for the explosion of inflation and bring them down by implementing price controls. This policy suggestion is based on an alternative analysis of the underlying problems that cause inflation. Weber points out that there had been a massive explosion in profits, which has contributed significantly to inflation:

“In 2021, US non-financial profit margins have reached levels not seen since the aftermath of the second world war. This is no coincidence. The end of the war required a sudden restructuring of production which created bottlenecks similar to those caused by the pandemic. Then and now large corporations with market power have used supply problems as an opportunity to increase prices and scoop windfall profits.” (Weber 2021).

In her article Weber continues to make references to the economic situation after the second world war as she is unfolding her policy proposal regarding strategic price controls. For that purpose she invokes all of the high profile economists, such as Irving Fisher, who called for the continuation of the price controls implemented during the war to avoid the danger of high inflation. To avoid the triggering of inflation, as it happened in 1946 when the price controls were discontinued anyway, Weber argues that strategic price controls should at least be considered as a policy tool. Of course, this argument does not come out of nowhere: Weber has long been researching price controls and had already written a book about them at this point in time with the title How China Escaped Shock Therapy: The Market Reform Debate.

The idea of even just considering strategic price controls as a policy tool was apparently heretic enough to not only make the article go viral but also to cause a huge backlash. Many of Weber's male colleagues as well as the media showed themselves from their worst side, when they reacted to her article in an extremely disrespectful manner:

“A business-school professor called it ‘the worst’ take of the year. Random Bitcoin guys called her ‘stupid.’ The Nobel laureate Paul Krugman called her ‘truly stupid.’ Conservatives at Fox News, Commentary and National Review piled on, declaring Weber’s idea ‘perverse,’ ‘fundamentally unsound,’ and ‘certainly wrong’.” (Carter 2023).

Some, like Krugman, apologized later on. A detailed account of the path Weber and her heterodox ideas took after her Guardian article, can be found in the New Yorker article What If We’re Thinking About Inflation All Wrong? Based on an interview with Weber, the article guides the reader through Weber’s journey from being the object of very unfair ridicule, to making her way well into mainstream economics. The article gives a good overview of the development of the debate on profit inflation from Weber’s guardian article up to June 2023. It also serves as a comprehensive introduction to the topic of sellers’ inflation in general and the discussion of corresponding policy proposals with a focus on the US.

A similar introduction is provided in the Jacobin article Isabella Weber Has Neoliberal Economists Running Scared by Simon Grothe. The article examines the impact Weber's research has had on neoliberal economics from a rather political standpoint. It breaks Weber's research and her policy proposals down in a very simple way and is therefore also a suitable introduction to the topic for readers with very little or no previous knowledge. It is available in both English and German: Wer hat Angst vor Isabella Weber?.

Below you will find information and links to the referenced publications in chronological order.

The Biden stimulus is admirably ambitious. But it brings some big risks, too.

Time: February 4, 2021

Author: Lawrence H. Summers

Type of publication: Newspaper article

Central term/question: Summers warns that a stimulus as big as Biden’s covid-19 relief plan entails major macroeconomic risks and must therefore be accompanied by corresponding adjustments in monetary and fiscal policy.

Go to publication

How Not To Panic About Inflation

Time: March 22, 2021

Author: Paul Krugman

Type of publication: Newspaper article

Central term/question: Krugman argues that inflation is transitory at this point in time.

Go to publication

Could strategic price controls help fight inflation?

Time: December 29, 2021

Author: Isabella M. Weber

Type: Newspaper article

Central term/question: Weber argues that strategic price controls should be considered as a policy instrument to fight inflation. In this context, she mentions the role the explosion of profits may have played for inflation in the US in 2021.

Go to publication

Why Larry Summers Thinks We Need Massive Unemployment to Beat Inflation

Time: July 7, 2021

Author: Jordan Weissmann

Type: Newspaper article based on an interview with Lawrence H. Summers

Central term/question: Jordan Weissmann interviews Lawrence H. Summers, who explains why he thinks we need huge unemployment rates to bring down inflation, and puts this in context with the Fed’s approach.

Go to publication

What if we’re thinking about inflation all wrong?

Time: June 6, 2023

Author: Zachary Carter

Type: Newspaper article based on an interview with Isabella M. Weber

Central term/question: The article guides through Weber’s journey from being the object of unfair ridicule to making her way well into mainstream economics. It also gives a comprehensive introduction to the topic of sellers’ inflation and an overview of the debate up to June 2023.

Go to publication

Isabella Weber Has Neoliberal Economists Running Scared

Time: August 8, 2023

Author: Simon Grothe

Type: Magazine Article

Central term/question: The article examines the effect Weber's research has had on neoliberal economics from a rather political standpoint and breaks down the idea of sellers’ inflation as well as Weber’s policy proposals in a very simple way.

Go to publication

2. The shift in the discourse on (profit) inflation triggered by Isabella Weber

Corporate profits have contributed disproportionately to inflation. How should policymakers respond?

 Time: April 21, 2022

Author: Josh Bivens

Type: Blogarticle

Central term/question: Josh Bivens examines unit price growth and shows that corporate profits have contributed significantly more to unit price growth since the second quarter of 2020 than in previous periods. This view of profit inflation was later referred to as looking at the profit share of unit prices.

 Go to publication​​​​​​​

Comment on publication

The first publication after Weber's Guardian article that sparked the discussion about profit inflation was a blog article by Josh Bivens, chief economist at the Economic Policy Institute (EPI), in April 2022: Corporate profits have contributed disproportionately to inflation. How should policymakers respond?. In this article, he shows that the ratio, in which the three components of unit prices (labor costs, non-labor costs and ‘mark-up’-profits) in the non-financial corporate (NFC) sector in the US are responsible for price increases, has shifted significantly since the second quarter of 2020.

“Since the trough of the COVID-19 recession in the second quarter of 2020, overall prices in the NFC sector have risen at an annualized rate of 6.1%—a pronounced acceleration over the 1.8% price growth that characterized the pre-pandemic business cycle of 2007–2019. Strikingly, over half of this increase (53.9%) can be attributed to fatter profit margins, with labor costs contributing less than 8% of this increase. This is not normal. From 1979 to 2019, profits only contributed about 11% to price growth and labor costs over 60 [...]” (Bivens 2022).

Bivens argues that this should not be read as a sign of increased corporate power but rather as a shift in how corporate power is being channeled. While in the past, the already existing power of corporations had mostly been used to suppress wages (as it had been the case in the aftermath of the 2008 financial crisis and the following Great Recession), it has now been channeled to drive up prices. Bivens also points out that the labor share of income and real wages are falling at that point in time and “that a simple macroeconomic imbalance of supply and demand is not driving inflation either, unless the relationship between a ‘hot’ economy and profit margins and real wages is just coincidentally behaving entirely differently in the current recovery than it has in the past” (Bivens 2022). He concludes that higher corporate profit margins and bottlenecks in the supply chain are responsible for inflation and that policy instruments designed to cool down the labor market (i.e. sharp interest rate hikes such as those called for by Summers) will not help. Instead he proposes alternative policy measures to counter firms pricing powers such as excess profit taxes.

The article is a good and short read and was crucial for the development of the discourse on profit inflation, as nearly all subsequent publications are referencing Bivens in some way. It is a must read for anyone who wants to dive deeper into the debate on profit inflation. Biven's method of conceptualizing profit inflation on the basis of the profit share of unit prices was later criticized by Marc Lavoie, which triggered a major debate.

The globalization of inflation

Time: May 11, 2022

Author: The speech was given by Isabel Schnabel.

Type: Speech

Central term/question: Isabel Schnabel talks about the globalization of inflation and briefly mentions profits being a key contributor to domestic inflation in this context.

  Go to publication

Comment on publication

In her speech on the globalization of inflation on 11 May 2022 Isabel Schnabel, member of the Executive Board of the ECB, spoke about profit inflation for the first time: 

“The second, and related, implication is that many firms have been able to expand their unit profits in an environment of global excess demand despite rising energy prices (...). The resilience of profits is particularly evident in those sectors most heavily exposed to global conditions, such as the industry and agricultural sector. (...) While large, export-oriented firms are probably benefitting the most, many smaller firms, in particular in contact-intensive services, will see their profits recover only gradually. But these data do imply that, on average, profits have recently been a key contributor to total domestic inflation, above their historical contribution [...]” (Schnabel 2022).

Her speech does not really add anything new to the theory or methodology of profit inflation. However, the fact that Schnabel talked about profit inflation at all made a big difference tothe debate about inflation and its counteracting policies. Having a member of the ECB Executive Board recognize the critical role of rising profits in driving inflation was an important step in bringing research on profit inflation out of the heterodox realm and on its way into the mainstream discourse.

Inflation in the Time of Corona and War

Time: May 30, 2022

Author: Servaas Storm

Type: Working paper

Central term/question: Servaas Storm examines different causes of and policy responses to US inflation in the context of the Covid-19 shock, briefly touching on the topic of rising profit margins as a contributing factor to inflation. 

  Go to publication

Comment on publication

In May 2022 Servaas Storm published a working paper titled Inflation in the Time of Corona and War, which touches on a number of questions about the US inflation in the context of Covid-19 shock. Storm’s main argument is that the high increase in inflation is not due to demand factors but to supply factors, not a result of the fiscal stimulus of the Biden administration, but of “sector-specific price increases in industries strongly affected by global commodity-chain disruptions.” (Storm 2022: 6). He proceeds to show that the Fed can therefore not safely bring down inflation and discusses alternative ways to reducing inflation including strategic price controls. In the course of the paper he also briefly touches on the issue of rising profit margins as a contributing factor to inflation and talks about a profit-price spiral rather than a wage-price spiral.

For this reason, the paper plays a relevant role in the development of the discourse around profit inflation. It does not deal with the topic of profit inflation in depth. But it is an interesting read for anyone who is looking for a well-rounded argument against explaining rise inUS-inflation in 2021 by fiscal stimulus and calling for help from the Fed, as Summers does.

Prices, Profits, and Power: An Analysis of 2021 Firm-Level Markups

Time: June 21, 2022

Authors: Mike Konczal, Niko Lusiani

Type: Research brief

Central term/question: Konczal and Lusiani explore the size and distribution of markups and profit margins across 3.698 firms operating in the US in 2021.

Go to publication

Comment on publication

In this research brief Prices, Profits, and Power: An Analysis of 2021 Firm-Level Markups from the Roosevelt Institute Mike Konczal and Niko Lusiani explore the size and distribution of markups and profit margins across 3.698 firms operating in the US in 2021. This is the first publication to relate the jump in markups to the three main explanatory stories of inflation: demand, supply, and market power. They find “that firms increased their markups substantially in 2021, both to their highest level and with the largest single-year increase since 1955.” (Konczal and Lusiani 2022: 11) and draw the following policy conclusion: 

“Even though these results may be specific to the inflation we’ve seen in 2021, markups being unusually and suddenly high means there is room for them to reverse with little economic harm and with likely societal benefit, including lower prices in the short term and less inequality and potentially more innovation in the medium term. We believe the evidence we have presented strengthens arguments for an all-of-government administrative, regulatory, and legislative approach to tackling inflation, which should include demand, supply, and market power interventions.” (Konczal and Lusiani 2022: 10).

Konczal’s and Lusiani’s publication marks a decisive turning point in the debate on profit inflation as they start to investigate the empirical evidence for it by looking at concrete changes in markups in the US. The publication is only 12 pages long and quite straightforward to read as long as you have a basic understanding of the questions discussed around inflation. It is a must read for anyone who wants to get familiar with the debate as it is referenced a lot in the following publications. 

Inflation in Times of Overlapping Emergencies: Systemically Significant Prices from an Input-output Perspective 

Time: December 2022

Authors: Isabella Weber, Jesus Lara Jauregui, Lucas Teixeira, Luiza Nassif Pires

Type: In December 2022 it was a working paper. A peer reviewed version has been published in April 2024.

Central term/question: The authors provide a modeling framework that examines the relationship between sector-specific shocks and general price stability in a Leontief model, an input-output model of the economy. This lays the foundation for Weber's subsequent studies on sellers’ inflation, even if this term is not used in this paper. 

Go to publication

Comment on publication

In November 2022 Isabella Weber and her co-authors published their groundbreaking working paper Inflation in Times of Overlapping Emergencies: Systemically Significant Prices from an Input-output Perspective. The paper lays out the theoretical basics and modeling approach for all of the following research on sellers’ inflation. Instead of tackling the origin of inflation as a purely macroeconomic problem, it explores the relationship between sector-specific shocks and overall price stability: Weber and her co-authors use a Leontief price model, an input-output model that imagines the whole economy as a “cross-sectoral network of cost-price linkages” (Weber et al. 2022, p. 7), to simulate the effect of supply shocks rippling through the economy. The simulation demonstrates both the direct impact of specific sectoral prices on the consumer price index (CPI) and the mediated, indirect inflationary effect that arises when the prices of one sector become the costs of another. This is used to identify systemically significant prices, i.e.prices that are important for monetary stability and contribute significantly to an increasing inflation. Instead of excluding goods with highly volatile prices from the core CPI, Weber and her co-authors examine the implications of price volatility transmission throughout the entire economy via input-output relationships. They use pre-pandemic average price volatilities, as well as the price shock data from Covid-19 and the war in Ukraine, to shock the simulation and find that the set of systemically significant prices remains nearly identical in all three scenarios: ‘Petroleum and coal products’, ‘Oil and gas extraction’, ‘Utilities’, ‘Chemical products’, ‘Farms’, ‘Food and beverage and tobacco products’, ‘Housing’ and ‘Wholsale trade’. The paper therefore argues that it would have been possible to identify vulnerable sectors for monetary stability before inflation took off and to strategically target specific prices through price stabilization measures. If such policies were to be implemented in the future, Weber and her co-authors argue, it would be possible to keep supply shocks from rushing through the whole economic system and causing an explosive inflation. They suggest an urgent shift towards this policy to ensure price stability during overlapping emergencies, where supply shocks are likely to occur regularly.

This paper has rightfully received a lot of attention and praise. By proposing a new modeling framework for inflation, Weber and her co-authors managed to do what nobody had done in quite some time: Successfully challenging the decade-long dominance of New-Keynesian approaches in inflation theory, modeling and policy. The paper is an essential reading for anyone interested in moving away from New-Keynesianism in macroeconomics, whether through new theoretical approaches, alternative mathematical models, a greater emphasis on empirical evidence or new policy instruments.

How Much Have Record Corporate Profits Contributed to Recent Inflation? 

Time: January 12, 2023

Authors: Andrew Glover, José Mustre-del-Río, Alice von Ende-Becker

Type: Article

Central question/term: The authors of this article examine the contribution of corporate profits to recent inflation by looking at firms’ markup growth in the US in 2021.

Go to publication

Comment on publication

In this publication by the Federal Reserve Bank of Kansas City Andrew Glover, José Mustre-del-Río, and Alice von Ende-Beckers suggest that markup growth has likely contributed more than 50 percent to 2021’s inflation. They do this by estimating the growth of firms’ mark up using the growth of firms’ ratio of sales to variable costs. The result: While inflation was 5.8% in 2021 (as measured by the price index for Personal Consumption Expenditures), the growth rate of markups was around 3.4 % in the same year. However, the authors explain this as an outcome of firms’ expectations of future marginal costs. While changes in demand might also have contributed to the firms’ ability to increase their markups, firms primarily raise their prices in anticipation of future cost increases.

The authors make their case for profit inflation drawing on standard microeconomic theory to model monopolistic pricing and then examine the reasons for markup growth within these models. If one is familiar with these models, the general train of thought of the paper is quite simple to follow. Regarding the role of the article as a whole, it is once again not so much about what was said as who said it: The fact that this article was published by economic researchers and policy advisers of the Federal Reserve Bank of Kansas city, who acknowledge the existence and importance of profit inflation during 2021’s inflation, was very decisive for the development of the debate around profit inflation. The publication is therefore frequently cited in the following debate - including by Weber herself.

Where are your inflation dollars going? Inflation broken down by profit, wages and industry

Time: January, 2023

Author: David MacDonald

Type: Peer reviewed report

Central question/term: David MacDonald uses the GDP deflator to break down where inflation dollars have gone in Canada by profits, wages and industry. He does this both for the economy as a whole and for each individual industry.

Go to publication

Comment on publication

David MacDonald’s report on profit inflation introduces an alternative methodology for understanding where inflation dollars are actually going and is the first conclusive examination of profit inflation in Canada. MacDonald, economist at the Canadian Centre for Policy Alternatives, criticizes the CPI as the ultimate measure of inflation as it can neither tell us the reasons for and the drivers of inflation nor where the additiona dollars paid by consumers are going. As an alternative he suggests using the GDP deflator as a measure of inflation. This makes it possible to track price changes across the entire economy, including those between businesses, which is essential to understanding the spread of rising energy costs through an economy. Using this method MacDonald examines where the inflation dollars between the third quarter of 2020 and the third quarter of 2022 were going - into profit, labour compensation or what is accounted for as ‘other costs’. He also breaks down their distribution by industry.

MacDonald points out an issue that the research on profit inflation faces again and again: A lack of adequate data. While the data set he deems missing for his research purpose is a result of a specific deficiency in Canadian statistics according to MacDonald, the data collected on profits is generally much less detailed and comprehensive than the data on wages. MacDonald’s report is intriguing for various reasons: First of all, he explains the measurement problems associated with the CPI, the advantages of using the GDP deflator and the implications of using different economic indicators in general very well. Secondly, just like Weber, he takes a step toward an alternative methodology that focuses more on supply chains in order to gain a more accurate understanding of the causes of inflation. It is not without reason that many other publications, including Weber and Lavoie, refer to MacDonald's study.

Sellers’ Inflation, Profits and Conflict: Why can Large Firms Hike Prices in an Emergency?

Time: February 27, 2023

Authors: Isabella M. Weber and Evan Wasner

Type: Working paper

Central question/term: Weber and Wasner coin the term sellers’ inflation in this paper, provide a theory to its three-stage process and apply it to the US from the first quarter of 2021 until the third quarter of 2023.

Go to publication

Comment on publication

This paper by Isabella Weber and Evan Wasner is at the core of the debate about profit inflation. However, Weber and Wasner themselves do not necessarily refer to it as profit inflation. Based on Lerner's Inflationary Depression and the Regulation of Administered Prices (Lerner 1958), they have chosen a different term for a good reason: Sellers’ inflation. This term already contains one of their main arguments: The origin of the COVID-19 inflation in the US is not macroeconomic, not due to aggregate demand exceeding the production capacity of firms, but microeconomic in the sense that it can be traced back to the ability of companies with market power to raise prices. Naturally, the argument Weber and Wasner develop still boils down to them arguing that firm profits were the key driver in 2021’s inflation. However, not all of the research on profit inflation explicitly addresses what Weber and Wasner call sellers’ inflation. Especially the publications before this paper mostly focus on showing that profits should be considered as an origin of inflation in the first place without having a common theoretical or methodological framework. This is what Weber and Wasner provided with their paper: The term sellers’ inflation as coined in their paper refers to a three-stage theory of an inflationary process triggered by a price shock in systemically relevant sectors. Weber and Wasner apply this theoretical concept about the three-stage-inflationary process to the COVID-19 inflation.

Let us reconstruct Weber’s and Wasner’s argument: They begin with an overview of the long-standing literature of the pricing behavior of firms, which they combine with a study of  earning calls. On this basis, they develop a theory of pricing on which they later base their concept of sellers’ inflation. The first two insights of Weber and Wasner are the following: 1) “Firms do not lower prices as doing so may spark a price war (Weber and Waser 2023: 5) and 2) “Firms only raise prices when they are confident that their market shares will not be harmed” (Weber and Wasner 2023: 5). The second principle is the decisive one for their pricing theory: A sector-wide input cost shock due to a bottleneck in an upstream sector (in other words: a shortage of input goods/raw materials that are necessary for the production processes of many companies in many sectors) can create a situation, in which firms can rationally expect their opponents to raise their prices. Previously, firms did not raise their prices, because there was a high probability of losing some of their market shares to competitors if they had done so. Due to the supply side bottleneck, however, their competitors as well as themselves have a limited production capacity: None of the firms is able to expand their production anymore and overtake the market territory of another firm if that firm raises its prices. This is how firms can gain temporary monopoly power through a supply-side bottleneck situation according to Weber and Wasner. At the same time the publicly perceived legitimacy for price increases can increase through media coverage in such a supply-side bottleneck situation as it has in 2021. These are the basic pricing principles that Weber and Wasner analyze and base their concept of sellers’ inflation on. Weber and Waser identify three stages in what they call sellers’ inflation: The impulse stage, the propagation and amplification stage, and the conflict stage.

At the impulse stage there is a cost shock in one or various systemically significant sectors. There could be various reasons for such a price shock, one of them being a real shortage of goods, a supply bottleneck in critical goods such as oil or computer chips. This gives firms in systemically significant upstream sectors temporary monopoly power to drive up prices as high as their demand allows them to. It can unleash a domino effect through different sectors and various stages of the value chain as discussed by Weber and her co-authors in their paper on inflation in times of overlapping emergencies.

According to Weber and Wasner, this happens in the propagation and amplification stage when sector-wide cost shocks are used as a coordination mechanism for price increases. Since companies know that their competitors will do the same, they can safely raise their prices to protect their profit margins. There is an implicit agreement that passing on costs is the correct response to the price shock. This is reinforced by media reports about supply chain issues, which legitimize these price hikes in the eyes of customers. Weber and Wasner point out that companies have to increase their prices by more than the increase in costs if they want to protect their profit margin. This means that the price hikes become higher and higher going downstream, because each firm inherits an initial upstream cost hike from its predecessor and then adds another price hike to protect its own profit margin. Eventually this results in an increase in the nominal value of profit, even though the firms just protected their profit margin from the costs. Weber and Waser call this the propagation stage. However, there might very well be companies that use their temporary monopoly position to increase their profit margins and thus amplify the initial cost shock.

The third stage is conflict inflation. As real wages and living conditions fall, workers will eventually try to reclaim their share of national income. However, Weber and Wasner point out that this is a very defensive move, as a temporary transfer of income from labor to capital has taken place, even if labor succeeds in restoring its share of national income. 

Taking up the debate on the transitory nature of inflation as argued by Krugman, Weber and Wasner conclude that this three-stage inflationary process could take a transitory or a persistent form, in which a ‘price-price’ spiral (and/or a spiraling conflict inflation) is triggered. However, they conclude that a policy response is required in each case not only because a transitory period of inflation can still be very long and damaging, but more importantly because in an age of overlapping emergencies frequent price shocks that trigger such spirals are to be expected. 

Weber and Wasner follow up their theoretical argument by applying it to the inflation in the US from the first quarter of 2021 to the third quarter of 2023. They do this on an aggregate level by looking at the corresponding macroeconomic data as well as on a firm level, by looking at individual firms and sectors. Finally, they conclude that the policy instruments designed to tackle inflation caused by excess demand by inducing a recession, will be counterproductive in the case of a sellers’ inflation. Once again they argue that a variety of new policy instruments is needed to take early action in such an inflationary process, especially as there are many overlapping emergencies and therefore overlapping price shocks are to be expected in the future.

Weber’s and Wasner’s paper is the central publication around which the entire emerging debate on profit inflation revolves. Despite its demanding intellectual nature, the paper is relatively accessible and only moderately hard to read, especially the theoretical part, the empirical part is somewhat more difficult to follow in depth. As Weber and Wasner build their whole argument around the thesis that we live in an age of overlapping emergencies, this paper is a must read for anyone even slightly involved with economic policy. They elegantly show what economics as a science can achieve and contribute to society if one dares to question outdated macroeconomic models that are no longer useful in an age of polycrisis: Not only do they offer a groundbreaking new approach to understanding inflationary dynamics that were not addressed systematically enough before - they do this without falling prey to the determinism that so many macroeconomic models suffer from. Their theory does not imply a policy conclusion purely based on its own logic. Instead it can be used to examine to what extent sellers’ inflation might exist in a specific historic situation on the basis of empirical data. This is what Weber and Wasner and many others have done since, and what has paved the way for inspired subsequent research in the field as well as much needed inflation policies, which many economists and policymakers have yet to follow.

3. Marc Lavoie’s critique and the following controversy over the notion of profit inflation

Controversies about the causes of post-covid inflation in North America

Time: February 22, 2023

Author: Marc Lavoie

Type: Recorded lecture

Central question/term: Lavoie formulates a critique of the notion of profit inflation. He bases this on the distinction between profits, the profit share, (estimated) profit margins and the percentage markup that firms use to set prices.

Go to publication

Comment on publication

In this lecture Marc Lavoie talks about the controversies between heterodox economists regarding the causes of the post-covid inflation in North America. He focuses on the situation in Canada and the role of profit margins. After shortly reviewing various possible explanations for the post-covid inflation he builds an argument against the case of profit inflation relying on a Post-Keynesian model. Lavoie points out that most of the new studies about profit inflation look at the ratio between unit labor cost and price as an estimate of profit margins. He makes the argument that this is not the same as the percentage markup that firms use when setting prices. According to Lavoie it is not enough to look at unit labor costs to observe possible changes of the percentage markups: This is because 1) overhead unit labor costs fall with a rise in the rate of utilization and 2) firms also have material cost. When you only look at the ratio between unit labor cost and price as an estimate of profit margins both of these things can lead to the illusion that the percentage markup has risen. But it could very well just be a result of a) the fall of overhead unit labor cost that occurs when firms increase their utilization after a recession and b) unit material costs rising faster than unit labor cost. Lavoie concludes that this is what happened in Canada during the post-covid inflation when the unit costs of (imported) material inputs rose faster than those of labor. Lavoie then discusses possible solutions to this measurement problem and to inflation itself. Other than a lot of his heterodox colleagues he does not object to raising interest rates as a solution to inflation. He concludes that a raise in interest rates done by all central banks alike would lead to a world slowdown and a drop in the prices of raw materials, which would have a strong impact on inflation without causing a massive increase in unemployment.

Lavoies lecture is one that needs to be studied: His discussion of profit inflation in this lecture is rather advanced as he makes a complex mathematical argument that requires a lot of previous knowledge to be followed. The lecture is not suitable as an introduction to the topic. But to really understand the debate of profit inflation, one has to delve into Lavoies work on the topic: The argument he made in this video stirred up a very lively debate between heterodox economists that is still going strong.

Some controversies in the causes of the post-pandemic inflation

Time: May 15, 2023

Author: Marc Lavoie

Type: Blogarticle

Central term/question: Once again Lavoie criticizes the notion of profit inflation based on the differentiation between the profit share and the percentage markup that firms use to set prices.

Go to publication

Comment on publication

In this blog article Marc Lavoie basically makes the same argument as in his lecture in February. The article is a little bit easier to follow than the video and precisely locates Lavoies point of view within the ongoing debate about inflation while referencing more recent publications (including Weber’s and Wasner’s paper) as it came out three months later. Whether one prefers the video or the article to retrace Lavoies argument is probably a matter of taste. However, to really break down his equations it is probably useful to consult both. 

The profit share and firm mark-up: how to interpret them?

Time: May 2023

Authors: Fabrizio Colonna, Roberto Torrini, Eliana Viviano

Type: Working paper

Central term/question: The authors explicitly examine the change of markups in certain sectors in German and Italian sectors.

Go to publication

Comment on publication

In this publication by the Italian central bank the authors make a similar point as Lavoie. They argue that the profit share can increase even if markups remain constant when intermediate input costs grow faster than labor costs. Like others before them, they point out that data on markups cannot easily be deferred from national accounts. However, they argue that it is possible to approximate the data for certain sectors in Italy and Germany and show that markups have indeed increased in some German sectors.

The publication is rather short but mostly consists of really complicated mathematical equations. Therefore it is probably mostly of interest for economists, econ students or other people who are familiar with these kinds of calculations and interested in a detailed mathematical approach to the topic. Apart from this, the section on the approximation of the change in markups in Germany based on Destatis data is worth looking into from a methodological point of view. The discursive importance of the publication lies in the fact that once again a central bank has confirmed the existence of profit inflation.

Once again on profit inflation: a follow-up on Marc Lavoie’s blog

Time: June 5, 2023

Author: Guillermo Matamoros

Type: Blogarticle

Central term/question: Matamoros picks up Lavoies critique of profit inflation and confronts it with some empirical evidence.

Go to publication

Comment on publication

Guillmero Matamoros picks up Lavoie’s point and confronts it with empirical evidence from the past. While he agrees with Lavoie on a theoretical level, he shows that in the past growing material unit costs have not always been associated with a high CPI inflation and firms increasing their prices significantly. Here he is in line with Weber and Wasner and argues that firm’s reactions to material cost pressure differ according to their market power. Matamoros argues: Because of the historically weak bargaining power of workers during the 2000s materials boom, firms were able to compress real wages. The supply-chain bottlenecks during the pandemic and the war forbade them from doing this but at the same time enabled them to exert market power to significantly increase the prices.

The article is short, on point with its arguments and rather easy to read. It is the first one to confront Lavoie’s critique with historical evidence that contradicts his argument. It also summarizes Lavoie’s point in a very short and accessible way at the beginning. The article is therefore quite helpful as an introductory read and can well be read as a part of the following debate.

Profit-Led Inflation and Markups: A Discussion

Central term/question: The whole discussion revolves around the question of what profit inflation actually means. It is usually referred to as profit-led inflation and there is much discussion about the distinction between the profit share, constant markups and increasing markups. 

This discussion contains multiple publications, which are individually listed below.

Go to publication

Comment on publication

This discussion on the blog of the Institute for New Economic Thinking (INET) encompasses four articles, two by Lavoie, one by Michalis Nikiforos and Simon Grothe and one by Servaas Storm. The articles discuss the existence and definition of profit inflation starting from Lavoie's previous blog article and his critique of the profit-led inflation story. The discussion mainly revolves around the question of how to define profit-inflation and the confrontation of Lavoie's theory with empirical evidence. While none of the authors negate Lavoie’s point that an increase in the profit share can stem from sinking overhead costs or rising material costs and is not sufficient for the diagnosis of profit inflation, they argue that this is not an exhaustive explanation for the recent inflation surge. Looking at Weber’s and Wasner’s paper, Nikiforos and Grothe emphasize that profit-led inflation does not require an increase in markups, which is the premise of Lavoie’s critique. While some firms may use the initial cost-push, bottleneck situation and their market power to increase their markups, profit-led inflation can also just refer to firms protecting their profit margins:

“One can quibble with the semantics. Is the term profit-led right? One advantage of the term is that it emphasizes the distributional source of inflation; specifically that in the face of a large increase in import prices profit margins are maintained while all the burden of the adjustment is borne by real wages. Ignoring this distributional aspect naturalizes the claim of corporations on output.” (Nikiforos and Grothe 2023).

They also argue that the Structuralist/Kaleckian theory of pricing and distribution is not as different from sellers’/profit-inflation as Lavoies thinks it is. Storm makes a similar point while going much more into mathematical depth and arguing alongside a gross output price equation. He agrees with Lavoie that an increase in the profit share cannot tell us anything about profit inflation because a higher price of intermediate (energy) inputs will raise the prices and the profit share. However, he points out that this is only true if all other factors are constant and that in the 1970s for example higher nominal wage growth limited the increase in the profit share and cooperations struggled to protect their profit markups. On this basis he starts developing his case for the existence of profit-led inflation:

“That is, even if we suppose (for the moment) that corporations succeeded in maintaining their profit mark-ups, but were unable to raise them, we should recognize this for what it is: a remarkable achievement! Unlike during the 1970s, corporations today wield sufficient market power to effectively protect their profit mark-ups (and, by doing so, to realize higher profits) during a time of inflationary stress that is comparable to that of the 1970s.” (Storm 2023).

He then continues in the spirit of Weber and Wasner to show that this is indeed not where profit inflation ended, but that the rise in profit markups has been the main driver of inflation for the U.S., the Netherlands and other Eurozone economies. While Storm uses a lot of empirical evidence to support this thesis, he also points out that the research on profit inflation suffers from a lack of data regarding firm’s profits/markups. 

Both articles are followed by a responding article from Lavoie. All authors agree that the discussion initiated by Lavoie was necessary in order to clarify the concepts, terms, definitions and data problems underlying the topic of profit inflation and to determine more precisely what is actually meant by profit inflation. For this exact reason the whole debate on the INET blog is very illuminating: All of the texts correspond very well with each other and bring some clarity regarding different definitions of profit inflation. They also highlight the difficulties regarding the interaction of theory, modeling and empirical data which profit-led inflation faces as a new research branch.

Below you will find information and links to the referenced publications in chronological order.

Markups, Profit Shares, and Cost-Push-Profit-Led Inflation

Time: June 6, 2023

Authors: Michalis Nikiforos, Simon Grothe

Type: Blog article

Go to publication

Profit-Led Inflation Redefined: Response to Nikiforos and Grothe

Time: June 6, 2023

Author: Marc Lavoie

Type: Blog article

Go to publication

Profit Inflation Is Real

Time: June 15, 2023

Authors: Servaas Storm

Type: Blog article. A peer reviewed version of this article was published in September 2023.

Go to publication

Profit Inflation and Markups Once Again

Time: June 15, 2023

Author: Marc Lavoie

Type: Blog article

Go to publication

Are Firm Markups Boosting Inflation? A Post-Keynesian Institutionalist Approach to Markup Inflation in Select Industrialized Countries

Time: August 14, 2023

Author: Guillmero Matamoros

Type: Peer reviewed article

Central question/term: Matamoros explicitly discusses markup inflation, i.e. inflation caused by a growth of markups.

Go to publication

In this article Matamoros provides a theoretical and empirical examination of markup inflation, i.e. inflation caused by the growth of markups, in selected industrial countries. He starts off by reviewing the nature of markup inflation within the Post-Keynesian pricing theory as well as in accordance with the Institutionalist approach. Matamoros concludes that while there are many different components to consider when looking at the causes of inflation through these lenses, there is no reason to disregard markup inflation on the theoretical basis of these theories. In the empirical part of the paper he estimates markups and their contribution to the inflation surge in 2021-2022 for six different industrialized countries. He also compares this to the role that markups played in the inflation in 1973 after the Oil Price shock. Furthermore, he examines the extent to which a growing capacity utilization might be a cause of the growth in the markup over unit costs (UC), as Lavoie and others have argued previously. At the end, Matatmoros provides various regression models that compare the statistical significance of capacity utilization and markups in terms of their contribution to inflation. Matamoros concludes that the evidence points to markup inflation playing a significant role in 2022, although there are still some issues with the measurement of unit material costs used to compute markups.

Matamoros introduces another term, markup inflation, which has left behind the controversy surrounding profit shares as a measure of profit inflation. While the previous discussion has started the process of clarification of the term profit inflation, Matamoros focuses on a precise examination of the role that larger markups can play in generating inflation. The theoretical part is very illuminating, because he elaborates on the theoretical post-Keynesian foundations of Lavoie's critique and situates his definition of markup inflation within the post-Keynesian and Institutionalist framework. This is something that is missing from the discussion about profit inflation a lot of the time as it is not always clear from which school of thought someone is arguing. The empirical part is interesting, because Matamoros translates the theoretical discussion of Lavoie's critique into a data examination that carefully attempts to separate markup inflation from other causes while pointing out the flaws of the underlying measurement and estimation methods. Especially the empirical part requires quite some previous knowledge to follow, the theoretical part is a bit easier to understand. Either way, it is well worth reading, as Matamoros manages to condense a large part of the previous discussion in his paper, and also emphasizes the theoretical foundations that are often not made so explicit elsewhere.

4. The example of the EU: What needs to change in inflation policy as a result of profit inflation?

Closing the EU’s inflation governance gap

Time: June 2024

Authors: Jan van’t Klooster, Isabella M. Weber

Type: Policy report

Central question/term: Van’t Kloster and Weber make recommendations for the EU in a world of shockflation, i.e. a world in which supply shocks are becoming normalized.

Go to publication

Comment on publication

This report is not only the last one in this collection, but also the most explicitly political one. Based on Weber’s previous research on shocks to systemically relevant prices and sellers’ inflation, van’t Klooster and Weber identify gaps in the EU’s inflation governance and make new policy recommendations. They begin with a historical overview of EU inflation policy since the 1970’s inflation and the ECB’s operational framework that emerged from it. Following this, they show the limits of this framework in a world of shockflation, by which they mean any form that the three-stage inflation process can take after a shock to systemically significant prices. They then propose a new governance structure for inflation for the EU, including policy recommendations like setting up physical buffer stocks, price caps and taxes on windfall profits.

Contrary to the other publications, this report focuses on drawing policy conclusions from sellers’ inflation for the European Union (EU). The report looks at the topic of sellers’ inflation from a completely different perspective, not only because it explicitly criticizes the ECB's monetary policy, but also because it explains its historical origins and shows why the resulting policies from this are no longer up to date. It is relatively easy to read and also suitable as an introduction to the subject of sellers’ inflation and the resulting need for a change in inflation policy, even though it does not elaborate on the mechanisms of sellers’ inflation in depth. It is also an important publication because it clarifies another term in the profit inflation debate and creates an even broader conceptual framework with the term shockflation.

Literature​​​​​​​

Bivens, Josh (2022, April 21): Corporate profits have contributed disproportionately to inflation. How should policymakers respond? Working Economics Blog. Retrieved from: https://www.epi.org/blog/corporate-profits-have-contributed-disproportionately-to-inflation-how-should-policymakers-respond/

Carter, Zachary (2023, June 6): What if we’re thinking about inflation all wrong? The New Yorker. Retrieved from: https://www.newyorker.com/news/persons-of-interest/what-if-were-thinking-about-inflation-all-wrong 

Colonna, Fabrizio; Torrini, Roberto; Viviano, Eliana (2023): The Profit Share and Firm Mark-up: How to Interpret Them? Questioni di Economia e Finanza Occasional Papers, No. 770, May, Rome: Banca d’Italia. Retrieved from: https://www.bancaditalia.it/pubblicazioni/qef/2023-0770/QEF_770_23.pdf?language_id=1

Glover, Andrew; Mustre-del-Rio, Jose; von Ende-Becker, Alice (2023, January): How Much Have Record Corporate Profits Contributed to Recent Inflation? Economic Review, Federal Reserve Bank of Kansas City, vol. 0(no.1), pages 1-13, January. Retrieved from: https://www.kansascityfed.org/research/economic-review/how-much-have-record-corporate-profits-contributed-to-recent-inflation/

Grothe, Simon (2023, August 8): Isabella Weber has Neoliberal Economists Running Scared. Jacobin. Retrieved from: https://jacobin.com/2023/08/isabella-weber-greedflation-inflation-profit-margins-economics

Konczal, Mike; Lusiani, Niko (2022, June 21): Prices, Profits, and Power: An Analysis of 2021 Firm-Level Markups, Roosevelt Institute. United States of America. Retrieved from: https://rooseveltinstitute.org/publications/prices-profits-and-power/. 

Krugman, Paul (2021, March 22): How Not to Panic About Inflation. The New York Times. Retrieved from: https://www.nytimes.com/2021/03/22/opinion/us-inflation-stimulus.html  

Lavoie, Marc (2023, February): Controversies about the causes of post-covid inflation in North America. YouTube. Retrieved from: https://www.youtube.com/watch?v=NcxmB4sUXtM 

Lavoie, Marc (2023, May 15): Some controversies in the causes of the post-pandemic inflation. Monetary Policy Institute Blog. Retrieved from: https://medium.com/@monetarypolicyinstitute/some-controversies-in-the-causes-of-the-post-pandemic-inflation-1480a7a08eb7

Lavoie, Marc (2023): Profit-Led Inflation Redefined: Response to Nikiforos and Grothe. Institute for New Economic Thinking. Retrieved from: https://www.ineteconomics.org/perspectives/blog/profit-led-inflation-redefined-response-to-nikiforos-and-grothe

Lavoie, Marx (2023): Profit Inflation and Markups Once again. Institute for New Economic Thinking. Retrieved from: https://www.ineteconomics.org/perspectives/blog/profit-inflation-and-markups-once-again 

Macdonald, David (2023, January): Where are your inflation dollars going? Inflation broken down by profit, wages and by industry. Canadian Centre for Policy Alternatives - Ontario Office. Canada. Retrieved from: https://policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2023/01/where-are-your-inflation-dollars-going%20%281%29.pdf

Matamoros, Guillermo (2023): Once again on profit inflation: a follow-up on Marc Lavoie’s blog. Monetary Policy Institute Blog. Retrieved from: https://medium.com/@monetarypolicyinstitute/once-again-on-profit-inflation-a-follow-up-on-marc-lavoies-blog-78f2986e3a39

Matamoros, Guillmero (2023): Are Firm Markups Boosting Inflation? A Post- Keynesian Institutionalist Approach to Markup Inflation in Select Industrialized Countries. Review of Political Economy, DOI: 10.1080/09538259.2023.2244440. Retrieved from: https://www.tandfonline.com/doi/abs/10.1080/09538259.2023.2244440  

Nikiforos, Michalis; Grothe, Simon (2023): Markups, Profit Shares, and Cost-Push-Profit-Led. Institute for New Economic Thinking. Retrieved from: https://www.ineteconomics.org/perspectives/blog/markups-profit-shares-and-cost-push-profit-led-inflation

Schnabel, Isabel (2022, May 11): The globalisation of inflation. European Central Bank. Retrieved from: https://www.ecb.europa.eu/press/key/date/2022/html/ecb.sp220511_1~e9ba02e127.en.html

Storm, Servaas (2022, May 30) Inflation in the Time of Corona and War. Institute for New Economic Thinking Working Paper Series No. 185. Retrieved from: https://www.ineteconomics.org/uploads/papers/WP_185-Storm-Inflation.pdf

Storm, Servaas (2023): Profit Inflation Is Real. Institute for New Economic Thinking. Retrieved from: https://www.ineteconomics.org/perspectives/blog/profit-inflation-is-real

Summers, Lawrence H. (2021, February 4): The Biden stimulus is admirably ambitious. But it brings some big risks, too. The Washington Post. Retrieved from: https://www.washingtonpost.com/opinions/2021/02/04/larry-summers-biden-covid-stimulus/

Van’t Klooster, Jan; Weber, Isabella M. (2024). Closing the EU’s inflation governance gap, EPRS: European Parliamentary Research Service. Belgium. Retrieved from https://coilink.org/20.500.12592/0zpcgbq

Weber, Isabella M. (2021, December 29): Could strategic price controls help fight inflation? The Guardian. Retrieved from: https://www.theguardian.com/business/commentisfree/2021/dec/29/inflation-price-controls-time-we-use-it

Weber, Isabella M.; Jauregui, Jesus Lara; Teixeira, Lucas; and Nassif Pires, Luiza (2022): Inflation in Times of Overlapping Emergencies: Systemically Significant Prices from an Input-output Perspective. Economics Department Working Paper Series. 340. Retrieved from: https://scholarworks.umass.edu/econ_workingpaper/340.

Weber, Isabella M.; Jauregui, Jesus Lara; Teixeira, Lucas; Nassif Pires, Luiza (2024, April). Inflation in times of overlapping emergencies: Systemically significant prices from an input–output perspective, Industrial and Corporate Change, Volume 33, Issue 2, April 2024, Pages 297–341. Retrieved from: https://academic.oup.com/icc/article/33/2/297/7603347 

Weber, Isabella M.; Wasner, Evan (2023). Sellers’ inflation, profits and conflict why can large firms hike prices in an emergency? University of Massachusetts Amherst. Retrieved from: https://scholarworks.umass.edu/entities/publication/ec927f53-3982-463d-83be-0afd41fcb4e5 

Weissman, Jordan (2021): Why Larry Summers Thinks We Need Massive Unemployment to Beat Inflation. Slate. Retrieved from: https://slate.com/business/2022/07/larry-summers-massive-unemployment-fed-inflation.html