Renowned economist Mahfi Eğilmez announced that after his previous statement that Turkey had entered a period of skimpflation (reducing the quality of a product) and shrinkflation (reducing the weight/size of a product) alongside high inflation, another new concept has now entered our lives.
In a statement shared on his social media account, Eğilmez said, "There is also greedflation," defining this new concept as the act of increasing the sales prices of goods and services above the rate of inflation, which emerges in countries with high inflation.
Pointing out that 'greed' means avarice, Eğilmez stated the following:
"In countries like Turkey that are dependent on imports and under the influence of dollarization, if interest rates are set incorrectly, all types of inflation emerge simultaneously. After that stage, it is not possible to permanently lower inflation solely by setting the interest rate correctly. There may be temporary declines due to the base effect.
There is also greedflation. Greed means avarice in English. This defines the act of taking advantage of the environment created by high inflation to increase the sales prices of goods and services even above the rate of inflation.
This can be seen all over the world. However, it does not appear much in places where inflation is not very high.
The cause of greedflation is the high level of inflation. Greedflation is inevitable with such high inflation. When you keep the interest rate at one-third of the real inflation level, these things become inevitable. Therefore, the incorrect monetary and fiscal policy being pursued has more of an impact on the formation of this situation than the firms themselves. Consequently, the Central Bank has no right to look for faults in others."
There is also greedflation. Greed means avarice in English. This defines the act of taking advantage of the environment created by high inflation to increase the sales prices of goods and services even above the rate of inflation.
— Mahfi Eğilmez (@mahfiegilmez) January 24, 2024
News Source: 12punto
