Stagflation in some form is coming. The trillion-dollar question is whether inflation becomes entrenched paulkrugman.substack.com/p/the-econom...
The Economics of Stagflation, Part II
What will follow the Trump shock?
Suppose the 2023-2024 greedflation hypothesis is correct. Would one of the reasons for the seemingly muted inflationary response to tariffs so far be that firms are reducing their margins to avoid losing sales? If so, then is it possible the tariffs may somehow be less inefficient than we think?
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So far, they have reduced margins and also front-run the tariffs by replenishing the stocks; this is changing now
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I think some of the muted response has been due to uncertainty about what tariffs will actually go into effect. TACO is glib but a lot of tariffs have been cans getting kicked down the road. That and the fact that we are such a service based economy stand out to me.
