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What is greedflation – and is it driving higher prices?

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(AP Photo/Paul Sancya)
Motorists stop for fuel at gas stations in Detroit, Tuesday, July 5, 2022. As Congress and now the Supreme Court stymie the Biden administration’s efforts to curb climate change, one thing the president doesn’t want - sky high gas prices - actually is nibbling away at emissions of heat-trapping gas.

Is inflation being aided and abetted by price-gouging?

The idea of exploiting inflation to create excessive profits has become known as greedflation—a concept that is typically polarizing. “It is a convenient political meme,” says William Dickens, university distinguished professor of economics and public policy at Northeastern.

Inflation hit a 40-year high of 9.1% in June, and Dickens says the causes have little to do with greed. “It’s exactly what an economist would expect to happen when there are supply shortages: A small change in the quantity of goods reaching the market can lead to a big change in prices in the right environment,” says Dickens, a former Brookings Institution fellow and consultant to central banks around the world.

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