IDEAS home Printed from https://ideas.repec.org/p/stc/stcp8e/202300600005e.html

Inflationary pressures, wages and profits

Author

Listed:
  • Hassan Faryaar
  • Danny Leung

Abstract

At 6.8% on an annual average basis, Consumer Price Index (CPI) inflation in 2022 reached a 40-year high. Survey data from Statistics Canada suggest that rising prices have affected many Canadians’ ability to meet day-to-day expenses and have led to a need to adjust spending habits to cope with inflation. To better understand the nature of high inflation and how it may evolve in the future, studies have looked at potential driving sources. For example, in Canada, Wang (2023) estimated the impact of import prices on inflation. Chen and Tombe (2023) examined the relative importance of supply and demand shocks in a perfectly competitive market. Faryaar et al. (2023) studied the impacts of rising markups on inflation in an imperfectly competitive market. In the United States, Stiglitz and Regmi (2022) and Jarsulic (2022) argued that the negative supply shock was the main driver of inflation but sectoral demand shifts and market power also fuelled the problem. Thus, there are different ideas in the literature on the main driver of inflation.

Suggested Citation

  • Hassan Faryaar & Danny Leung, 2023. "Inflationary pressures, wages and profits," Economic and Social Reports 202300600005e, Statistics Canada, Analytical Studies and Modelling Branch.
    • Handle: RePEc:stc:stcp8e:202300600005e
    DOI: https://doi.org/10.25318/36280001202300600005-eng
    as

    Download full text from publisher

    File URL: https://www150.statcan.gc.ca/n1/pub/36-28-0001/2023006/article/00005-eng.htm
    Download Restriction: no
    File URL: https://www150.statcan.gc.ca/n1/pub/36-28-0001/2023006/article/00005-eng.pdf
    Download Restriction: no
    File URL: https://libkey.io/https://doi.org/10.25318/36280001202300600005-eng?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. repec:stc:stcp8e:2023006e is not listed on IDEAS
    2. Gumiel, José & Hahn, Elke, 2018. "The role of wages in the pick-up of inflation," Economic Bulletin Boxes, European Central Bank, vol. 5.
    3. Hassan Faryaar & Danny Leung & Alexandre Fortier-Labonté, 2023. "Markups and inflation: Evidence from firm-level data," Economic and Social Reports 202300600004e, Statistics Canada, Analytical Studies and Modelling Branch.
    4. Weimin Wang, 2023. "Import prices and inflation in Canada," Economic and Social Reports 202300600002e, Statistics Canada, Analytical Studies and Modelling Branch.
    5. Simcha Barkai, 2020. "Declining Labor and Capital Shares," Journal of Finance, American Finance Association, vol. 75(5), pages 2421-2463, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vallés, Javier & Salas Fumás, Vicente & San Juan, Lucio, 2022. "Corporate economic profits in the euro area: The relevance of cost competitive advantage," International Review of Economics & Finance, Elsevier, vol. 80(C), pages 569-585.
    2. Enrico Sergio Levrero & Giacomo Sbrenna, 2022. "Some Factors Affecting US Capital Profitability over the Last Decades," Bulletin of Political Economy, Bulletin of Political Economy, vol. 16(2), pages 77-101, December.
    3. Jacob, Tinu Iype & Paul, Sunil, 2024. "Labour income share, market power and automation: Evidence from an emerging economy," Structural Change and Economic Dynamics, Elsevier, vol. 69(C), pages 37-45.
    4. Lorenz K.F. Ekerdt & Kai-Jie Wu, 2024. "The Rise of Specialized Firms," Working Papers 24-06, Center for Economic Studies, U.S. Census Bureau.
    5. Chrisp, Joe & Garcia-Lazaro, Aida & Pearce, Nick, 2023. "Technological chance and growth regimes: Assessing the case for universal basic income in an era declining labour shares," FRIBIS Discussion Paper Series 01-2023, University of Freiburg, Freiburg Institute for Basic Income Studies (FRIBIS).
    6. Terranova, Roberta & Turco, Enrico M., 2022. "Concentration, stagnation and inequality: An agent-based approach," Journal of Economic Behavior & Organization, Elsevier, vol. 193(C), pages 569-595.
    7. Ruiyang Hu & Yibai Yang & Zhijie Zheng, 2023. "Effects of subsidies on growth and welfare in a quality‐ladder model with elastic labor," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 25(5), pages 1096-1137, October.
    8. Babina, Tania & Barkai, Simcha & Jeffers, Jessica & Karger, Ezra & Volkova, Ekaterina, 2023. "Antitrust Enforcement Increases Economic Activity," HEC Research Papers Series 1488, HEC Paris.
    9. Ferrando, Annalisa & McAdam, Peter & Petroulakis, Filippos & Vives, Xavier, 2021. "Product market structure and monetary policy: evidence from the Euro Area," Working Paper Series 2632, European Central Bank.
    10. Fabian Eser & Peter Karadi & Philip R. Lane & Laura Moretti & Chiara Osbat, 2020. "The Phillips Curve at the ECB," Manchester School, University of Manchester, vol. 88(S1), pages 50-85, September.
    11. Thomas Hasenzagl & Luis Perez, 2023. "The Micro-Aggregated Profit Share," Papers 2309.12945, arXiv.org, revised Nov 2023.
    12. Maarten De Ridder, 2024. "Market Power and Innovation in the Intangible Economy," American Economic Review, American Economic Association, vol. 114(1), pages 199-251, January.
    13. Antonio Acconcia & Elisa Scarinzi, 2022. "The Effects of Local Demand and Supply Restrictions on Markup," CSEF Working Papers 635, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 17 Mar 2022.
    14. Piton, Sophie, 2021. "Economic integration and unit labour costs," European Economic Review, Elsevier, vol. 136(C).
    15. Daniel Berkowitz, 2020. "Declining Market Competition in China," Working Paper 6897, Department of Economics, University of Pittsburgh.
    16. Ansgar F. Quint & Jonas F. Rudsinske, 2024. "Asymmetric general oligopolistic equilibrium," The World Economy, Wiley Blackwell, vol. 47(3), pages 1167-1190, March.
    17. Aaberge, Rolf & Modalsli, Jorgen Heibo & Francesconi, Marco & Vestad, Ola L., 2024. "How Business Income Measures Affect Income Inequality and the Tax Burden," IZA Discussion Papers 17458, IZA Network @ LISER.
    18. Domenico Delli Gatti & Roberta Terranova & Enrico Maria Turco, 2024. "Industrial Policy in Times of Market Power," CESifo Working Paper Series 11544, CESifo.
    19. Abramova, Inna, 2024. "Labor supply and M&A in the audit market," Journal of Accounting and Economics, Elsevier, vol. 78(1).
    20. Matthias Kehrig & Nicolas Vincent, 2021. "The Micro-Level Anatomy of the Labor Share Decline," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(2), pages 1031-1087.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:stc:stcp8e:202300600005e. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mark Brown (email available below). General contact details of provider: https://edirc.repec.org/data/stagvca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.