Re:Analysis finds Australia’s inflation being driven by comp...
by roenxi on Saturday February 25, 2023 @07:57AM
(#34936312)
> ... even if competition does assert itself eventually it is slow ...
This analysis is not accounting for the risk that businesses face in the current environment. Australia has recently put a lot of pressure on small businesses. I still see empty store fronts every day. It is likely competition is slow because all the people who could compete are weighing up the odds of their business being shut down and not liking their chances.
In fact, the idea that inflation is being 'driven' by profits is foolish. Profits are a result of market conditions - inflation was caused by mass disruption of the economy combined with money printing. The people who benefited the most from that were big businesses but they weren't in the driver's seat for what was going on.
This analysis is not accounting for the risk that businesses face in the current environment. Australia has recently put a lot of pressure on small businesses. I still see empty store fronts every day. It is likely competition is slow because all the people who could compete are weighing up the odds of their business being shut down and not liking their chances.
In fact, the idea that inflation is being 'driven' by profits is foolish. Profits are a result of market conditions - inflation was caused by mass disruption of the economy combined with money printing. The people who benefited the most from that were big businesses but they weren't in the driver's seat for what was going on.