Current:Home > InvestWhat has been driving inflation? Economists' thinking may have changed -Excel Wealth Summit
What has been driving inflation? Economists' thinking may have changed
View
Date:2025-04-17 17:45:53
Economists say that inflation is just too much money chasing too few goods.
But something else can make inflation stick around.
If you think of the 1970s, the last time the U.S. had really high sustained inflation, a big concern was rising wages. Prices for goods and services were high. Workers expected prices to be even higher next year, so they asked for pay raises to keep up. But then companies had to raise their prices more. And then workers asked for raises again. This the so-called wage-price spiral.
So when prices started getting high again in 2021, economists and the U.S. Federal Reserve again worried that wage increases would become a big problem. But, it seems like the wage-price spiral hasn't happened. In fact wages, on average, have not kept up with inflation.
There are now concerns about a totally different kind of spiral: a profit-price spiral. On today's show, why some economists are looking at inflation in a new light.
This episode was produced by Sam Yellowhorse Kesler and engineered by Katherine Silva, with help from Josh Newell. It was fact-checked by Sierra Juarez and edited by Jess Jiang.
Help support Planet Money and get bonus episodes by subscribing to Planet Money+ in Apple Podcasts or at plus.npr.org/planetmoney.
Always free at these links: Apple Podcasts, Spotify, Google Podcasts, NPR One or anywhere you get podcasts.
Find more Planet Money: Facebook / Instagram / TikTok / Our weekly Newsletter.
Music: "Razor Blade Disco," "Inside Job," and "Roller Disco."
veryGood! (6)
Related
- Meet the volunteers risking their lives to deliver Christmas gifts to children in Haiti
- EU agrees on a new migration pact. Mainstream parties hope it will deprive the far right of votes
- Al Roker Asks Critics to Back Off Kelly Clarkson Amid Weight Loss Journey
- Pro-Palestinian protesters place fake bloody corpses at home of University of Michigan official
- Paige Bueckers vs. Hannah Hidalgo highlights women's basketball games to watch
- North Carolina revenue decline means alternate sources for voucher spending considered
- Slovak politicians call for calming of political tensions after shooting of prime minister
- Judge says Delaware vanity plate rules allow viewpoint discrimination and are unconstitutional
- Megan Fox's ex Brian Austin Green tells Machine Gun Kelly to 'grow up'
- Andy Cohen Weighs in on Rumors Dorit Kemsley's Separation From PK Is a Publicity Stunt
Ranking
- Cincinnati Bengals quarterback Joe Burrow owns a $3 million Batmobile Tumbler
- Man pleads guilty in fatal shooting of off-duty New Orleans officer and his friend in Houston
- Jennifer Hudson reflects on two decades of success, new season of talk show
- Two 17-year-old American soldiers killed in Korean War accounted for after more than 70 years
- North Carolina justices rule for restaurants in COVID
- Sun emits its largest X-class flare of the solar cycle as officials warn bursts from massive sunspot not done yet
- Kansas governor cites competition concerns while vetoing measure for school gun-detection technology
- Missouri lawmakers renew crucial $4B Medicaid tax program
Recommendation
Paige Bueckers vs. Hannah Hidalgo highlights women's basketball games to watch
“Raise the Age” juvenile justice reforms altered by North Carolina Senate
Here's what Americans think is the best long-term investment
Lisa Vanderpump Addresses Rumors Vanderpump Rules Is Canceled Amid Hiatus
Trump invites nearly all federal workers to quit now, get paid through September
Investigation continues into 4 electrical blackouts on ship that caused Baltimore bridge collapse
Sophie Turner on 'hurt' of Joe Jonas divorce, talks 'hero' friend Taylor Swift in Vogue interview
Miss USA and Miss Teen USA's moms say they were 'abused, bullied, and cornered'