“Supply shocks” make it sound like something that could not be anticipated, rather than something that was caused by active incompetence from auto manufacturers at the start of the pandemic.
The supply shocks of checks notes three years ago, were certainly unanticipated. But it's been three years now, and prices haven't come down even though supply problems are clearing up. So what's up with prices? Well, to paraphrase the old sportscaster Warner Wolf, let's just go to the quarterly reports! Around the all the industries profits are setting records while they reassure investors that supply chain price increases are immaterial, and have full expectation that customers will simply accept the new prices.
>> the idea that firms are capitalizing on their market power by raising their prices higher and faster than the growth in their production costs.
You think this is a plausible explanation in a competitive capitalist economy rather than the problem being trillions of dollars having been printed which devalues all money which makes prices go up which makes the corporations look like they made record profits because you HAVE to charge more money because all money is worth less and every input costs more? I'm not saying they didn't necessarily make record profits, btw, but if they did then good on them and that smells like a blood in the water type of business opportunity.
Even worse, when you dive into the "supply shocks" they were all in all fairly minor and tracked the decrease in demand. A lot of inflation is just companies using the excuse to raise prices and pad the bottom line.
https://www.kansascityfed.org/Economic%20Review/documents/93...