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

Sen. Dianne Feinstein remembered as trailblazer for women in politics, ardent defender of human rights

09.29.2023
The Pentagon is seen on Sunday, Aug. 27, 2023, in Washington.

Homeland security expert details what would a government shutdown mean for US national defense

09.29.2023
The Google sign is shown over an entrance to the company’s new building in New York on Wednesday, Sept. 6, 2023.

Google monopoly trial shows appetite for enforcement on Big Tech, antitrust experts say

09.29.23
Q&A