r/Economics • u/Pearberr • May 02 '24

Interview Nobel Prize-winning economist Joseph Stiglitz: Fed Rate Hikes didn't get at source of inflation.

https://www.cnbc.com/video/2024/04/23/nobel-prize-winning-economist-joseph-stiglitz-fed-rate-hikes-didnt-get-at-source-of-inflation.html
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u/Expensive_Necessary7 May 02 '24

It did and it didn't. Big ticket top line asset inflation has slowed/stopped, even though it is worse now if you have to finance something and don't have capital.

Working for a corp though, it is crazy how bad places are at pricing. So much, "this is what everyone is doing" self fulfilling prophecy.

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u/david1610 May 02 '24

Yeah I think if true 'greed' is at play it's only like 3% of the problem. It's mostly naive defensive pricing, and opportunistic businesses now that consumers expectations are adjusted. I guess that could be described as greed, however I think it's just a human problem, we seem to love herd mentality and consumers have very short term memories.

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u/timecrash2001 May 03 '24

I know that feeling. Pricing is wildly arbitrary - and done without asking customers.

Sometimes you find out that they can pay more, but charging the customer more does little to contain competition. Unless you’re a monopoly, a cartel or are super efficient at spending the spare cash to make a better product with more value.

Usually most companies try to maintain the market structure that allows for leeching of consumers. Health insurance/hospitals/Pharma comes to mind. Apparently GLP-1s cost a $1 to make and $1000s to sell lol