Mark-ups made up more than 50% of US inflation – Kansas City Fed

Kansas City Federal Reserve
David R. Frazier Photolibrary, Inc. / Alamy Stock Photo

Firms’ mark-ups likely contributed more than 50% of inflation in 2021, research published by the Kansas City Federal Reserve finds, suggesting firms used their market power to raise prices.

Authors Andrew Glover, José Mustre-del-Río and Alice von Ende-Becker characterised mark-ups in 2021 as “substantially higher” than in the preceding decade.

The authors define mark-ups as “the ratio between the price a firm charges and the firm’s current marginal cost of production”. The mark-up ratio

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