Greedflation

Question A:

A significant factor behind today’s inflation in Europe is dominant corporations in uncompetitive markets taking advantage of their market power to raise prices in order to increase their profit margins.

Responses weighted by each expert's confidence

Question B:

A significant factor behind today’s inflation in some sectors of the European economy is dominant corporations in uncompetitive markets taking advantage of their market power to raise prices in order to increase their profit margins.

Responses weighted by each expert's confidence

Question C:

A significant factor behind today’s inflation in some sectors of the European economy (both competitive and concentrated) is distortions in the aggregate economy where supply does not meet demand.

Responses weighted by each expert's confidence

Question A Participant Responses

Participant University Vote Confidence Bio/Vote History
Allen
Franklin Allen
Imperial College London
Uncertain
5
Bio/Vote History
This is a very interesting and important question. I haven't seen good broad based studies looking at this issue.
Antras
Pol Antras
Harvard
Disagree
8
Bio/Vote History
Blanchard
Olivier Blanchard
Peterson Institute
Uncertain
6
Bio/Vote History
Bloom
Nicholas Bloom
Stanford
Disagree
8
Bio/Vote History
Firms have always had an incentive to make profits.
Blundell
Richard William Blundell
University College London Did Not Answer Bio/Vote History
Botticini
Maristella Botticini
Bocconi
Uncertain
6
Bio/Vote History
Bénassy-Quéré
Agnès Bénassy-Quéré
Paris School of Economics
Disagree
8
Bio/Vote History
True only in some countries, depends on sectors, fragile sector-level data that may be revised, and above all, margins can only be assessed over several years, given various adjustment lags.
Carletti
Elena Carletti
Bocconi Did Not Answer Bio/Vote History
Danthine
Jean-Pierre Danthine
Paris School of Economics
Disagree
5
Bio/Vote History
De Grauwe
Paul De Grauwe
LSE
Agree
7
Bio/Vote History
Eeckhout
Jan Eeckhout
UPF Barcelona
Disagree
8
Bio/Vote History
The evidence indicates that aggregate shocks (supply chain, energy prices, Covid stimulus) have affected competitive as much as concentrated markets
Fehr
Ernst Fehr
Universität Zurich
Agree
6
Bio/Vote History
Freixas
Xavier Freixas
Barcelona GSE
Disagree
3
Bio/Vote History
Fuchs-Schündeln
Nicola Fuchs-Schündeln
Goethe-Universität Frankfurt Did Not Answer Bio/Vote History
Galí
Jordi Galí
Barcelona GSE
Disagree
7
Bio/Vote History
Garicano
Luis Garicano
LSE Did Not Answer Bio/Vote History
Gorodnichenko
Yuriy Gorodnichenko
Berkeley Did Not Answer Bio/Vote History
Griffith
Rachel Griffith
University of Manchester Did Not Answer Bio/Vote History
Guerrieri
Veronica Guerrieri
Chicago Booth Did Not Answer Bio/Vote History
Guiso
Luigi Guiso
Einaudi Institute for Economics and Finance
Uncertain
6
Bio/Vote History
Guriev
Sergei Guriev
Sciences Po
Disagree
7
Bio/Vote History
Honohan
Patrick Honohan
Trinity College Dublin
Uncertain
5
Bio/Vote History
Some evidence suggests this is happening but not clear that market power is significantly increased by the inflationary conditions.
Javorcik
Beata Javorcik
University of Oxford
Disagree
6
Bio/Vote History
Krahnen
Jan Pieter Krahnen
Goethe University Frankfurt
Uncertain
5
Bio/Vote History
Not knowing the numbers, I can only guess - and disagree with the anti-market undertone of the statement. If anything, higher prices induce investment and increased supply (and lower prices) down the road.
Kőszegi
Botond Kőszegi
Central European University Did Not Answer Bio/Vote History
La Ferrara
Eliana La Ferrara
Harvard Kennedy Did Not Answer Bio/Vote History
Leuz
Christian Leuz
Chicago Booth
Disagree
2
Bio/Vote History
It is a possibility in some markets, but I don't think it is large enough in aggregate to be a "significant factor" in the overall inflation rate (unless one includes energy here, which is a key driver, but largely due to the Russian invasion of Ukraine)
-see background information here
Mayer
Thierry Mayer
Sciences-Po Did Not Answer Bio/Vote History
Meghir
Costas Meghir
Yale
Uncertain
9
Bio/Vote History
Pagano
Marco Pagano
Università di Napoli Federico II
Uncertain
1
Bio/Vote History
Pastor
Lubos Pastor
Chicago Booth
Agree
10
Bio/Vote History
There are signs of increasing profit margins contributing to inflation in several EU countries.
Persson
Torsten Persson
Stockholm University Did Not Answer Bio/Vote History
Pissarides
Christopher Pissarides
London School of Economics and Political Science Did Not Answer Bio/Vote History
Portes
Richard Portes
London Business School
Agree
5
Bio/Vote History
Prendergast
Canice Prendergast
Chicago Booth
Uncertain
6
Bio/Vote History
Propper
Carol Propper
Imperial College London
Uncertain
4
Bio/Vote History
Rasul
Imran Rasul
University College London
Disagree
6
Bio/Vote History
Reichlin
Lucrezia Reichlin
London Business School
Agree
5
Bio/Vote History
Reis
Ricardo Reis
London School of Economics
Strongly Disagree
4
Bio/Vote History
Unlikely from the start given theory; very hard to identify empirically; no compelling evidence to reject the null hypothesis of no effect.
-see background information here
-see background information here
-see background information here
Repullo
Rafael Repullo
CEMFI
Uncertain
2
Bio/Vote History
Rey
Hélène Rey
London Business School Did Not Answer Bio/Vote History
Schoar
Antoinette Schoar
MIT
Disagree
7
Bio/Vote History
Storesletten
Kjetil Storesletten
University of Minnesota
Disagree
7
Bio/Vote History
Sturm
Daniel Sturm
London School of Economics
Disagree
4
Bio/Vote History
Van Reenen
John Van Reenen
LSE
Disagree
7
Bio/Vote History
Van der Ploeg
Rick Van der Ploeg
Oxford
Agree
6
Bio/Vote History
Vickers
John Vickers
Oxford
Disagree
5
Bio/Vote History
Voth
Hans-Joachim Voth
University of Zurich
Uncertain
6
Bio/Vote History
Whelan
Karl Whelan
University College Dublin Did Not Answer Bio/Vote History
Wyplosz
Charles Wyplosz
The Graduate Institute Geneva
Agree
4
Bio/Vote History

Question B Participant Responses

Participant University Vote Confidence Bio/Vote History
Allen
Franklin Allen
Imperial College London
Uncertain
5
Bio/Vote History
It seems banking has a problem of this type. Net interest margins seem sticky. Not sure how many other areas have this kind of problem.
Antras
Pol Antras
Harvard
Uncertain
6
Bio/Vote History
Blanchard
Olivier Blanchard
Peterson Institute
Uncertain
6
Bio/Vote History
Bloom
Nicholas Bloom
Stanford
Disagree
8
Bio/Vote History
Blundell
Richard William Blundell
University College London Did Not Answer Bio/Vote History
Botticini
Maristella Botticini
Bocconi
Uncertain
6
Bio/Vote History
Bénassy-Quéré
Agnès Bénassy-Quéré
Paris School of Economics
Uncertain
5
Bio/Vote History
The connection with competition in Europe is unclear (energy, international fret).
Carletti
Elena Carletti
Bocconi Did Not Answer Bio/Vote History
Danthine
Jean-Pierre Danthine
Paris School of Economics
Uncertain
5
Bio/Vote History
De Grauwe
Paul De Grauwe
LSE
Agree
7
Bio/Vote History
Eeckhout
Jan Eeckhout
UPF Barcelona
Disagree
8
Bio/Vote History
Fehr
Ernst Fehr
Universität Zurich
Agree
6
Bio/Vote History
Freixas
Xavier Freixas
Barcelona GSE
Agree
5
Bio/Vote History
Fuchs-Schündeln
Nicola Fuchs-Schündeln
Goethe-Universität Frankfurt Did Not Answer Bio/Vote History
Galí
Jordi Galí
Barcelona GSE
Disagree
7
Bio/Vote History
Garicano
Luis Garicano
LSE Did Not Answer Bio/Vote History
Gorodnichenko
Yuriy Gorodnichenko
Berkeley Did Not Answer Bio/Vote History
Griffith
Rachel Griffith
University of Manchester Did Not Answer Bio/Vote History
Guerrieri
Veronica Guerrieri
Chicago Booth Did Not Answer Bio/Vote History
Guiso
Luigi Guiso
Einaudi Institute for Economics and Finance
Agree
7
Bio/Vote History
Guriev
Sergei Guriev
Sciences Po
Disagree
7
Bio/Vote History
Honohan
Patrick Honohan
Trinity College Dublin
Agree
4
Bio/Vote History
The “some sectors” qualification makes this proposition more likely
Javorcik
Beata Javorcik
University of Oxford
Uncertain
1
Bio/Vote History
Krahnen
Jan Pieter Krahnen
Goethe University Frankfurt
Uncertain
5
Bio/Vote History
If true, why haven't they taken advantage earlier?
Kőszegi
Botond Kőszegi
Central European University Did Not Answer Bio/Vote History
La Ferrara
Eliana La Ferrara
Harvard Kennedy Did Not Answer Bio/Vote History
Leuz
Christian Leuz
Chicago Booth
Uncertain
2
Bio/Vote History
Concentration or noncompetitive markets can be an amplifying factor in an inflationary environment. But it is unclear that it is a "significant" factor (again excluding energy sector due to special situation). It would likely be a measurable factor in some markets.
-see background information here
Mayer
Thierry Mayer
Sciences-Po Did Not Answer Bio/Vote History
Meghir
Costas Meghir
Yale
Uncertain
9
Bio/Vote History
Pagano
Marco Pagano
Università di Napoli Federico II
Uncertain
1
Bio/Vote History
Pastor
Lubos Pastor
Chicago Booth
Agree
10
Bio/Vote History
Persson
Torsten Persson
Stockholm University Did Not Answer Bio/Vote History
Pissarides
Christopher Pissarides
London School of Economics and Political Science Did Not Answer Bio/Vote History
Portes
Richard Portes
London Business School
Agree
5
Bio/Vote History
Prendergast
Canice Prendergast
Chicago Booth
Agree
6
Bio/Vote History
Propper
Carol Propper
Imperial College London
Uncertain
4
Bio/Vote History
Rasul
Imran Rasul
University College London
Disagree
4
Bio/Vote History
Reichlin
Lucrezia Reichlin
London Business School
Agree
5
Bio/Vote History
Reis
Ricardo Reis
London School of Economics
Strongly Disagree
6
Bio/Vote History
Is "some sectors" means many relevant sectors we are back at the previous question; if it means few, then this is not inflation but changes in relative prices.
Repullo
Rafael Repullo
CEMFI
Uncertain
2
Bio/Vote History
Rey
Hélène Rey
London Business School Did Not Answer Bio/Vote History
Schoar
Antoinette Schoar
MIT
Uncertain
7
Bio/Vote History
Storesletten
Kjetil Storesletten
University of Minnesota
Disagree
7
Bio/Vote History
Sturm
Daniel Sturm
London School of Economics
Disagree
4
Bio/Vote History
Van Reenen
John Van Reenen
LSE
Agree
6
Bio/Vote History
Market power does seem to have risen over last 3 decades. So this plays some part in higher prices (but not the dominant role)
-see background information here
-see background information here
Van der Ploeg
Rick Van der Ploeg
Oxford
Strongly Agree
6
Bio/Vote History
Vickers
John Vickers
Oxford
Uncertain
5
Bio/Vote History
Voth
Hans-Joachim Voth
University of Zurich
Uncertain
5
Bio/Vote History
market power has not changed much in recent years; inflation has. we need other explanations why in an accounting sense, markups have gone up.
Whelan
Karl Whelan
University College Dublin Did Not Answer Bio/Vote History
Wyplosz
Charles Wyplosz
The Graduate Institute Geneva
Agree
3
Bio/Vote History

Question C Participant Responses

Participant University Vote Confidence Bio/Vote History
Allen
Franklin Allen
Imperial College London
Uncertain
5
Bio/Vote History
Again don't know broad-based studies that provide a convincing answer to this.
Antras
Pol Antras
Harvard
Agree
7
Bio/Vote History
Blanchard
Olivier Blanchard
Peterson Institute
Disagree
7
Bio/Vote History
I object to distortions. In a competitive market with inelastic demand, a restriction on supply increases profits. Nothing to do with market power or distortions
Bloom
Nicholas Bloom
Stanford
Uncertain
8
Bio/Vote History
Blundell
Richard William Blundell
University College London Did Not Answer Bio/Vote History
Botticini
Maristella Botticini
Bocconi
Agree
7
Bio/Vote History
Bénassy-Quéré
Agnès Bénassy-Quéré
Paris School of Economics
Disagree
5
Bio/Vote History
Inflation in Europe so far seems to have followed a mechanical dissemination process, with limited room for supply-demand imbalance.
Carletti
Elena Carletti
Bocconi Did Not Answer Bio/Vote History
Danthine
Jean-Pierre Danthine
Paris School of Economics
Agree
5
Bio/Vote History
De Grauwe
Paul De Grauwe
LSE
Uncertain
5
Bio/Vote History
Eeckhout
Jan Eeckhout
UPF Barcelona
Strongly Agree
9
Bio/Vote History
Fehr
Ernst Fehr
Universität Zurich
Agree
8
Bio/Vote History
Freixas
Xavier Freixas
Barcelona GSE
Agree
5
Bio/Vote History
Fuchs-Schündeln
Nicola Fuchs-Schündeln
Goethe-Universität Frankfurt Did Not Answer Bio/Vote History
Galí
Jordi Galí
Barcelona GSE
Agree
7
Bio/Vote History
Garicano
Luis Garicano
LSE Did Not Answer Bio/Vote History
Gorodnichenko
Yuriy Gorodnichenko
Berkeley Did Not Answer Bio/Vote History
Griffith
Rachel Griffith
University of Manchester Did Not Answer Bio/Vote History
Guerrieri
Veronica Guerrieri
Chicago Booth Did Not Answer Bio/Vote History
Guiso
Luigi Guiso
Einaudi Institute for Economics and Finance
Uncertain
7
Bio/Vote History
Guriev
Sergei Guriev
Sciences Po
Uncertain
5
Bio/Vote History
Honohan
Patrick Honohan
Trinity College Dublin
No Opinion
Bio/Vote History
Emergence of “shortages” as a frequent phenomenon is indeed noteworthy, but I would not characterise it as is proposed in the question.
Javorcik
Beata Javorcik
University of Oxford
Agree
6
Bio/Vote History
Krahnen
Jan Pieter Krahnen
Goethe University Frankfurt
Agree
6
Bio/Vote History
Kőszegi
Botond Kőszegi
Central European University Did Not Answer Bio/Vote History
La Ferrara
Eliana La Ferrara
Harvard Kennedy Did Not Answer Bio/Vote History
Leuz
Christian Leuz
Chicago Booth
Agree
4
Bio/Vote History
Mayer
Thierry Mayer
Sciences-Po Did Not Answer Bio/Vote History
Meghir
Costas Meghir
Yale
Uncertain
9
Bio/Vote History
Pagano
Marco Pagano
Università di Napoli Federico II
Uncertain
1
Bio/Vote History
Pastor
Lubos Pastor
Chicago Booth
Agree
10
Bio/Vote History
Yes but supply shocks have been fading recently. Past supply shocks continue contributing to inflation through persistence.
Persson
Torsten Persson
Stockholm University Did Not Answer Bio/Vote History
Pissarides
Christopher Pissarides
London School of Economics and Political Science Did Not Answer Bio/Vote History
Portes
Richard Portes
London Business School
Disagree
5
Bio/Vote History
Prendergast
Canice Prendergast
Chicago Booth
Agree
7
Bio/Vote History
Propper
Carol Propper
Imperial College London
Strongly Agree
5
Bio/Vote History
Rasul
Imran Rasul
University College London
Agree
6
Bio/Vote History
Reichlin
Lucrezia Reichlin
London Business School
Agree
8
Bio/Vote History
Reis
Ricardo Reis
London School of Economics
Strongly Disagree
7
Bio/Vote History
Disagree with wording: supply and demand are model objects, and are always same by definition of equilibrium. Yes, some of the high inflation is due to shocks to marginal costs. But less so right now than one year ago, and only when combined with loose monetary policy.
-see background information here
Repullo
Rafael Repullo
CEMFI
No Opinion
Bio/Vote History
Rey
Hélène Rey
London Business School Did Not Answer Bio/Vote History
Schoar
Antoinette Schoar
MIT
Agree
7
Bio/Vote History
Storesletten
Kjetil Storesletten
University of Minnesota
Disagree
6
Bio/Vote History
Sturm
Daniel Sturm
London School of Economics
Agree
5
Bio/Vote History
Van Reenen
John Van Reenen
LSE
Agree
7
Bio/Vote History
Most evidence in US, but also some in Europe
-see background information here
Van der Ploeg
Rick Van der Ploeg
Oxford
Agree
6
Bio/Vote History
Vickers
John Vickers
Oxford
Uncertain
3
Bio/Vote History
Voth
Hans-Joachim Voth
University of Zurich
Agree
4
Bio/Vote History
Whelan
Karl Whelan
University College Dublin Did Not Answer Bio/Vote History
Wyplosz
Charles Wyplosz
The Graduate Institute Geneva
Uncertain
4
Bio/Vote History
Yes, at the macro level, we have a demand and a supply shock but I am not sure about the micro aspects.