Good news for inflation as corporate pricing power evaporates

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Last year, The Australia Institute released research claiming that the corporate sector was responsible for over two-thirds of Australia’s inflation above the Reserve Bank of Australia’s (RBA) target.

OECD research released last year also showed that unit profits made up a greater share of price increases than unit labour costs during the pandemic.

Past research from the United States also found that increased mark-ups accounted for more than half of inflation in 2021.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.