Skip to content
GIVING DAY is April 11! Starting now, you can support CSSH students and programs with a $5+ gift to any of our funds.
Apply
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

image of new show

The hit series ‘Shogun’ is exposing more people to Japanese history. But how accurate is it?

03.28.2024
image of Trump Media & Technology Group stock market trading information is seen on a television at the Nasdaq Marketplace on March 26, 2024 in New York City. Photo by Michael M. Santiago/Getty Images

Is Trump Media & Technology Group a meme stock? Finance experts draw parallels to GameStop, crypto.

03.28.2024
image of dark silver iphone in hand with title

European regulators are cracking down on Alphabet, Apple and Meta. Will that have an impact on how their products work around the world?

03.28.24
All Stories