Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/324091 
Year of Publication: 
2023
Citation: 
[Journal:] PSL Quarterly Review [ISSN:] 2037-3643 [Volume:] 76 [Issue:] 306 [Year:] 2023 [Pages:] 261-276
Publisher: 
Associazione Economia civile, Rome
Abstract: 
The return of persistent inflation in OECD countries has been the most significant macroeconomic phenomenon in recent years. This article analyses different explanations for the current inflationary dynamics, from which various policy recommendations arise. Specifically, by using a Multi-Regional Input-Output (MRIO) model, the article investigates whether the rise in profits and profit share is the result of changes in the behaviour of firms or just the natural outcome of rising energy costs, in the case of France, Italy and Spain. Our results indicate that companies raised prices more than necessary in order to maintain their levels of profitability in each of the European economies analysed, confirming that inflation hikes were led by surging profits. This implies that the introduction or strengthening of price controls would help to rapidly bring inflation under control, protecting the purchasing power of households.
Subjects: 
inflation
input-output
price controls
profit-price spiral
JEL: 
E31
J30
C67
E64
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article

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