by Nicolás Cachanosky
The American Institute for Economic Research
In recent years, the resurgence of inflation in the United States and other advanced economies has brought a revival of conflict theories of inflation (CTIs). These theories, which are gaining momentum in academic and policy-making circles as well as the popular press, posit that inflation is fundamentally the result of distributional conflicts among various social groups. The historical roots of CTI reveal their policy implications. For instance, Elizabet Warren has spearheaded initiatives rooted on CTI ideas such as Shrinkflation Prevention-Act and the Price Gauging Act of 2024. The “greedflation” narrative, so popular in recent years by Isabella Weber, is another example of CTI-inspired rationale surrounding higher-than-normal inflation.
The rising popularity of CTIs can be seen in the public discourse on “greedflation,” where inflation is attributed to corporate greed. In academia, influential figures such as Olivier Blanchard have echoed similar sentiments.