Inflation: A story of dominant positions?
Could the proliferation of dominant positions be the main cause of the strong surge in inflation since 2021? In the US goods market, the dominant positions of companies have drive n up profit margins; In commodity markets, producer countries with dominant positions have reduce d production to drive up prices (clearly visible in the case of oil); In labour markets, the very high level of hiring difficulties shows that wage earners have regained dominant positions , resulting either from a decline in the labour supply or from wage earners’ rejection of a number of jobs. More than just higher interest rates, c ombating inflation will therefore require combating dominant positions. This could take the form of: More active competition policies; Diversification of energy sources; Training and skills improvement policies aimed at increasing the labour supply.