After shrinkflation and greedflation, a new term from Mahfi Eğilmez: 'Unrecorded inflation'

Economist Mahfi Eğilmez had previously introduced the concepts of shrinkflation, skimpflation, and greedflation to the Turkish agenda.

In a post on X, Eğilmez stated, "We continue to make new contributions to economic science every day." 

In his article titled 'Unrecorded Inflation', Eğilmez said the following:

"IT DOES NOT REPRESENT ALL GOODS AND SERVICES"

"According to the data announced by TURKSTAT, the latest 12-month inflation figure (CPI) points to a rate slightly above 67 percent. In this case, all goods and services whose prices have increased by more than 67 percent since February of last year fall under the scope of greedflation. However, there are some problems with taking the 67 percent rate as a basis: (1) Inflation being 67 percent does not mean that the price of every good or service in the economy has increased at this rate. This is an average rate. The prices of some goods or services may have increased by less than 67 percent, while others may have increased by more. (2) The CPI basket, which is used to calculate the 67 percent inflation rate, is a basket consisting of 406 goods and services selected through surveys from among thousands of types of goods and services in the economy. Therefore, it does not represent all goods and services."

"IS THERE AN OPTICAL ILLUSION?"

"Despite all this, when people look at the price of a good or service and want to compare it with the past, they usually refer to the CPI change rate. If the price of any good was 100 TL a year ago and became 167 TL a year later, it is said that the price of that good has increased at the rate of inflation, but it is not claimed that there is greedflation. On the other hand, if the price of the same good has risen to 200 TL, the 67 TL portion of the difference is perceived as normal inflation, and the remaining 33 TL portion is perceived as greedflation.

Is this really the case? Or is there an optical illusion involved?"

"UNRECORDED INFLATION"

"While looking for an answer to this question, we must first decide what real inflation is. Because people do not believe that the CPI rate reflects the truth. Let's say we take into account the e-CPI inflation of around 121 percent, which is the measurement of the ENAG group; if the price of the good in question should have actually been 221 TL at the end of the year but was 200 TL, there is no greedflation here. In fact, the price of this good has remained behind even the average inflation.

In Turkey, as in every subject recently, there is a serious optical illusion regarding inflation. This illusion continues in determining who is responsible for this situation. Most people argue that real inflation is not 67 percent, but at least double that, but when it comes to the issue of who is responsible for this, they start blaming sellers, landlords, or banks.

Is there greedflation in Turkey or an optical illusion? It will not be possible to give a correct answer to this question unless an evaluation can be made based on real data. On the other hand, we can call the difference between the inflation rate announced by TURKSTAT and the inflation rate announced by ENAG 'unrecorded inflation'. Thus, Turkey may have contributed to the literature by adding unrecorded inflation to concepts that have long been known, such as the informal economy, unrecorded income, and informal employment."