"We argue that market power by some corporations and in some sectors – including
temporary market power emerging in the aftermath of the pandemic – amplified inflation.
It made price increases peak higher and remain more persistent than they would have
been in a world with less market power. To be clear: corporate profits were thus not the
sole driver of inflation, nor are dominant corporations to blame for the energy shock
caused by Russia’s invasion of Ukraine. But we argue that their market power exacerbated
the fallout – and that this is not sufficiently captured in the prevailing macroeconomic
debate or in workhorse models."
