This podcast episode explores the phenomenon of companies raising prices during the pandemic and beyond, even openly discussing it with investors. It discusses the factors contributing to inflation, such as increased demand, supply chain disruptions, and rising costs of labor, raw materials, and shipping. The episode also examines the impact of inflation on consumer behavior, highlighting that as long as the strong labor market persists and incomes rise, consumers are able to afford higher prices. It discusses the collective action problem created by companies raising prices, resulting in uncertainty for consumers and difficulty in distinguishing legitimate price increases from opportunistic ones. The episode explores the options of combating inflation through raising interest rates or possibly accepting higher inflation as the new normal. Ultimately, it poses the question of how the economy can escape the grip of inflation.
