Skip to content
Connect
Stories

How inflation is influencing the way we think and behave

People in this story

(Gaya Gupta/The Washington Post via Getty Images)

Driven largely by soaring gas prices, inflation reached levels not seen in decades over the last year, according to new Consumer Price Index data. Prices at the pump helped accelerate inflation to 8.6% for the 12 months ending in May, CNN reports—and there seems to be no end in sight. Such price disruptions are sure to have impacts on consumer behavior. Market-watchers have suggested that an “inflationary psychology” is starting to set in, which describes a situation wherein consumers expect future prices to be higher than they are at present, creating less short-term resistance to spending.

With some consumers willing to spend more to get ahead of inflation, firms are equally willing to raise wages, leading to fears of a “wage-price spiral,” or what’s referred to as inflation’s self-fulfilling prophecy. Inflationary psychology may just be one ingredient propelling a wage-price spiral, says Rory Smead, associate professor of philosophy at Northeastern, who researches the evolution of social behavior. But the situation is manifold, and it’s hard to predict how consumers will respond to the economy-wide price surge. 

Continue reading at News@Northeastern.

More Stories

COLORADO SPRINGS, COLORADO - NOVEMBER 20: People hold a vigil at a makeshift memorial near the Club Q nightclub on November 20, 2022 in Colorado Springs, Colorado. Yesterday, a 22-year-old gunman entered the LGBTQ nightclub and opened fire, killing at least five people and injuring 25 others before being stopped by club patrons.

In wake of Colorado Springs massacre, 2022 is deadliest year for mass killings, Northeastern expert says

11.22.2022
A scientist holds a multi-well plate with pieces of raw cultured meat in the biotechnology laboratory. Synthetic or in vitro meat production concept. Cultured meat.

Could lab-grown meat pave the way for more ethical, environmentally friendly food?

11.22.2022
The Harriet Tubman House Memory Project is one of four Boston Research Center efforts to preserve local history. The Harriet Tubman House, a community center which stood at 566 Columbus Ave, in Boston's South End neighborhood from 1975 to 2020, was demolished in 2019 but lives on through a detailed digital history hub created by the BRC. Northeastern University Library, Archives and Special Collection

Northeastern’s Boston research center creates a new model for preserving local history

11.23.22
News@Northeastern