Comment by obastani

I don’t really understand the argument that corporate profits are driving inflation. If demand for a product goes up, we would naturally expect prices to rise since there is more competition for a fixed set of goods. Since the cost of producing the product has not increased, corporate profits necessarily rise. In the long term, we would expect competition to drive prices back to marginal cost as production of that product increases, but this process can takes time.

In this case, how do you separate inflation due to increased demand from inflation due to corporate profits? The two seem inextricably tied to me.