YouSaid · the spoken record

Isabella Weber

lines on the record: 42
first: 2023-06-08
most recent: 2023-06-08
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“In the sense that the discourse is becoming more open. And I think that an open discourse is really what we need if we are faced with these unprecedented situations because you cannot respond to an unprecedented situation by saying we have always known how exactly it works.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“The seller's inflation story, I feel like it's related, but also kind of slightly separate in the sense that the price control debate is really about emergency measures that you take, right? And the seller's inflation paper is really about how do we understand this kind of inflation. But I think the shift that we are seeing now that of course is not complete and so on, but that at least it's becoming more acceptable to think about other ways of understanding how inflation came about is kind of the first step that we need to take to move towards a different kind of economic stabilization paradigm that I personally think we really need in this age of overlapping emergencies. So it's been quite a wild ride, but I guess talking today has been very wild. So God knows what's going to happen next. It looks like there has been some movement in a good direction.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“My sense is that the more urgent the emergency became, the more acceptable these kind of measures ended up being. And I think that in Europe you can see this very clearly in terms of the reactions to the war, but then also basically as it became colder and the fear of winter just became very real, the perceived emergency became more intense and the willingness to take these kind of measures became greater.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Totally astonishing to me. The reason why I wrote this article at the time was because A, I felt that the debate amongst economists was polarized between those who are saying like, oh, we don't have to worry about inflation too much, it's just transitory. And those who were saying, oh, inflation is really a problem, therefore we have to hike interest rates yesterday. And I felt like there was a position missing there, which is like, yeah, we have very large price spikes and they are a problem. But if you have a fire in the kitchen, you don't set your whole house underwater, but you try to put out the fire in the kitchen, right? So not as an apologist of price controls, but to say, hey, there is something sectoral that we can do. And direct means of price stabilization can be an emergency measure to buy time when you are faced with these kind of crazy price spikes. Now, the key word here, I think, is emergency measure.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, maybe to add to your list, we have also, of course, seen the European gas price caps and international, I mean transnationally coordinated kind of price cap and the oil price cap against Russian oil, which I mean, in principle could be for all oil, right? I mean, just in terms of the technicality of the price control mechanism. So yes, absolutely.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Can I say it one more thing? Yeah, go for it. Sorry, this one's awkward. So actually, I mean, you're saying you didn't want to make this a pork discussion, but the funny thing is while I was in China, I was doing many interviews with people on inflation, including forks from the World Bank, from the IMF, from major banks and so on. And eventually every single economist that I talk to started to talk about pork. Oh, really? They even have all these jokes on pork. So they say the CPI in China actually stands for the China.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Absolutely, and it's actually been for the first time a situation where European pork importers have had difficulty selling in China because suddenly the prices collapsed in China and in Europe they were going up with the very high grain prices. So that, yeah, absolutely.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Say something about what you are doing and when not to say something about what you are doing. So it's quite demanding and a lot of things can go wrong.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Absolutely. And I mean, the pork example is actually one where it doesn't work that great because Hawk Cycle's thing, right? And the other thing in China too, and you have like millions of small holders farming pigs. So you have very intense hawk cycle. So you can smoothen the cycle, but you never get rid of it. But it's technically not at all simple, right? I mean, you need to have basically a system that can store that stuff in a way that the pork that they sell is the pork that you want to buy and eat, right? You need to have agents that are able to purchase this on a relatively large scale. You then have to have these auctions that have to be professionally organized. And you also have to understand the market really well. I mean, remember when there was an announcement earlier this year that the US was going to buy back oil to replenish its strategic petroleum reserve and then oil prices started spiking, right? So you have to have a very good handle on how to communicate with the market, when to”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Managed, and it's basically a situation where most of the imports are managed by very large state owned company, Kafka, and then domestically. So in that sense, domestic prices are not really as interlinked as they would be in other situations. And domestically, they still have a minimum purchase price so that they basically ensure that wherever it's reasonable to cultivate with this minimum purchase price grain is being cultivated. And then they have these grain auctions where they would be adding supply to the grain market if there is a shortage from basically a state-owned reserve system. So in some sense, they have for grain what the US has with the strategic petroleum reserve just on probably even much more gigantic scale. And I'm saying probably here because we don't really know the size of the reserves. It's a state secret.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so I think there are different layers. So, first of all, I mean, for grain, which I think is an important one for food, they have, of course, a gigantic national reserve system, right? And they basically have to a certain degree buffer their domestic prices against international prices. So Chinese prices used to be for important grains like rice, wheat used to tend to be higher than the international prices, but stable. And when the international prices exploded, they kind of stayed broadly speaking where they were and the way that they have managed that is that, first of all, they have a very high self-sufficiency rate, but I don't think this is enough because, I mean, the US has a very high self-sufficiency rate, right? It's even like a major exporter. Germany, for example, also has a very high self-sufficiency rate. It's also an exporter. But still these international price movements have arrived right in China. They have not because the import quota is very strictly.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think it's really an important thing to look at. I think we haven't discussed this generally enough, that there has been really this pretty dramatic divergence between Europe and the US with this high inflation in China with almost a deflation kind of problem in some stretches. I think, of course, it has to do with the different timeline of COVID. I mean, no question about that, right? I mean, they have had shutdowns when we were not in shutdown and they were open when we were in shutdown and so on, right? Clearly macroeconomically speaking, they are at a different point. They also did not have the kind of stimulus packages that they had in the global financial crisis and so on. So certainly the macro environment is different. But I think there's still the question of how did the global food and energy price shock arrive in China, right? And why did this shock not unleash similar kind of dynamics?”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Absolutely, and even like between product lines in individual firms, like if you look at what happened in the car sector, right, where suddenly because there you actually had a real physical bottleneck and car companies decided to, I mean, not only, but predominantly produce higher-end models that then resided in a situation where all these cars that normal people are driving became basically not available on the market, right? Which is an outcome that is in many ways undesirable because then maybe people can't make it to work because they can't afford a car, which then kind of makes the labor market less fluid in a situation where we already have labor shortages in certain areas.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“This much. Yeah, everybody seems to be really surprised that the degree of coordination on that front has been totally surprising. But then you can also not check it out, right? I mean, we saw when Walmart for a very short blip of time was making announcement that they are at this counter and that they are not going to play this price hiking game and then they had this share sell off, right? So, I mean, there's also like kind of a discipline from financial markets to keep doing this, but at the same time it's kind of”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“It does trigger rate hikes. It does create a situation where I think a lot of corporate leaders are also nervous like how far can we take this, right? It's like it's a bit like you're in this gambling game where you keep winning, but you kind of don't trust”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, absolutely. I think there is on the one hand a lot of coordination, right, with these price hikes. On the other hand, there's a lot of coordination failure if you want so because there are outcomes of this process that are in some sense not sustainable, right? And actually if we look at what happened after World War I, when you had like kind of price hikes coming out of a bottleneck kind of transition from war to post-war economy, you had a very short-lived boom that was very inflationary and then a sharp turn into a deflationary recession. I don't think that such a sharp turn is in the carts because now we have these very concentrated sectors for most of the economy, which means that in these sectors, firms are price makers and they tend to not lower prices in these kind of sudden ways in which we would see it in commodity markets or price taking markets. So I'm not so worried about this sudden turn as I would have been in a different setup. But nevertheless, yes, it does trigger.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“These firms might still have an incentive to do a price over volume, but at least they would use the money that they get to invest in the stuff that we really need to make our economy more resilient rather than to buy back shares or do these kind of things.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly, exactly. So it's not necessarily the case that if you can, I mean, if you have learned that you can actually reap record profits when your supply is constrained, that this then encourages you to have a lot of redundant extra capacity or to hugely expand your capacity and therefore go for big investments. Where there are areas where we are particularly worried about curtailing investments with these kind of policy measures, I think you could have a policy that basically stipulates that if you're investing in like let's say green technologies, like let's say you are using the crisis a moment to upgrade your technology to become a low carbon manufacturer or something like this, then you could have a tax write-off for these kind of investments that we really want, that we want for green transition, which that would not count towards the ways in which your windfall profits tax is calculated. So that in this kind of situation”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I mean, first of all, I would say that hiking interest rates is a recipe designed to bring down investment, right? So if we are talking about different ways of fighting inflation that I am more worried about the interest rate hiking policy than I am about an emergency price gouging law or a national emergency windfall profit tax or something like that. But also we have to see that if we are talking about price over volume, then we are in a situation where with lower volumes, firms can make more money, right? Which means that they are basically contracting their capacity. And I think that if we look at the oil sector, which on my mind has been a very important element in this inflation story, that it's quite clear that they are saying very explicitly on the earnings calls that they are taking a disciplined approach to investment because they are reaping record profits as they have reduced capacity.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, if I was a leader of one of these large shipping companies, I was in no rush to get out of this bottleneck because it's the best of times for me, right? So for example, for shipping, I think, A, we need protocols. Like, I mean, how do you unblock a port? And B, some sort of a price gouging legislation of the type that the New York State Attorney General is currently introducing, also for essential stuff that is further up the value chain rather than just essential consumer facing stuff, I think could be really helpful because this is not to say that prices cannot go up at all if this kind of emergency happens and shipping companies have higher costs because things get complicated. But it's to say that they don't get these perverted incentives of having freight rates that increase multiple times over, which I think would actually also give them more incentive to get out of the blockage as opposed to basically profit from the situation. So this is an example of a very specific service.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so I think if we look at services, shipping has probably been the most important service that had a very large price explosion that I would see as part of the impulse stage. And I think what we saw there is that basically you had, I mean, a literal bottle deck, right? Like if you think back to how the port of LA looked, I mean, this is the image of a bottleneck, right? Shipping companies could increase their freight rates several times over. So prices went up and they had actually the largest profits in years and years, right? So they were in a situation where”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“I also think that if it is the case that there is such a big energy shock, which then central banks would say, oh, we are actually looking through this, right? Then your mindset is like, oh, yeah, this is something that is not part of the core inflation. I'm just looking through this, like, la, it's not happening, right? I think this is not the right mindset that we need because this is a very, very dangerous impulse. So in that sense, it's kind of leading us in the wrong direction. But also at the end of the day, what happens with interest rate hikes is that it's designed to cool down the labor market, right? Now, if it is a case that inflation erases purchasing power and wage increases were not the origin of this inflation, this means that the majority of wage-dependent people are actually being hurt by inflation. And then they're kind of punished a second time by cooling down the labor market, right? So I think even from a”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“shouldn't go higher. I mean, what are you gonna do, right? If you have another shock that unleashes this kind of process. So first of all, I would say it's too blunt of a tool to deal with frequent extremely sectoral shocks, as I think they have become more likely. Of course, no one hopes that they will happen. I don't hope they are happening, but I think they have become more likely. So I don't think we are prepared to actually achieve price stability with the tools that we have in terms of just relying on the central bank”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, at best in a very roundabout way. I mean, in any case, this is always a very roundabout instrument, right? We have to keep in mind that this is a very, very indirect tool of fighting inflation, which, by the way, if we are in a situation where we are already at the edge of a recession, where we are already at the edge of a banking crisis, where we have had a pandemic and we have a war, and now let's say we have another major climate shock. And let's say we have already hiked interest rates to a point where even hawkish people feel like, okay, really.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it's a mechanism that basically takes away the incentive to do a price over volume strategy, right? Because price over volume makes sense if you can't increase prices so much that even You are selling less, you still end up making more money because you have hike prices so much, right? Now, of course, there can be situations where price over volume happens to just protect profit margins. So win for a profits tax would not happen with that. But we have seen situations where firms actually have managed to quite dramatically increase their margins with this kind of pricing behavior. So it would kind of cut off the edge of that process, right? would cut off what we are calling in our paper amplification. So you have this initial shock and then this shock is actually not just propagated through your system, but it's amplified as it coordinates these additional profit increasing price hikes.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Now for this propagation and amplification that comes as firms react to these shocks, I think what we basically need is some sort of a pinfall profits tax that would kick in whenever there is a major emergency because we have now learned that in these emergencies these pretexts that happen can present situations where prices can go up very quickly. And I think that if corporate leaders had to learn this this time, then next time around they have a playbook in hand, right? They know how price over volume works. They know what to look for. They know what they did last time. And if this is a coordination issue in the sense that it depends on what your competitors are doing, and last time it worked out really well because everybody kind of implicitly agreed to be doing exactly that, then next time around, they just have to look back at what they did last time.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“And saying, Oh, yeah, the last three years somehow weren't great, but now we are back to normal life. So this is a nice historical anecdote or something like this, but they're important because we are living in an age of overlapping emergency. And as far as I understand, people in the grain market are saying things like we are basically one major weather event away from another price spike in grain, right? And if there are bad harvests that are related to climate change happening much faster than many of us might have thought, tipping points being reached much, much sooner than climate scientists still projected not that long ago, right? Then I think this is something that is quite likely to happen. So what I'm thinking about here is really a form of economic disaster preparedness so that we have shock absorbers where shocks to these systemically important things like grain, like energy can be absorbed locally so that we don't even get this gigantic impulse in the first place.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Sooner because there was a mindset on the part of policymakers to say oil price is going up as they started going up in 2021 is a real problem and has the potential to undermine price stability and economic stability, then they might have acted sooner and they might have acted more decisively. Now, it's of course not only about oil, it's also about gas, other sources of energy, it's about other forms of raw materials and importantly also about grain. I think for grain actually we ideally would need some sort of a coordinated international buffer stock, which is an idea that Keynes had for the Bretton Woods institutions, something that he wanted to see as one of the Bretton Woods institutions, but that did not materialize and there have been proposals like this in the 70s when, I mean, obviously there were also very major commodity price cycles going on at the time. So I think these type of ideas are pretty important and they are important not only like looking back”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Absolutely, and I would actually say that the investors' expectations is another set of expectations that's probably more immediate from the perspective of people taking pricing decisions, right? When representatives of, let's say, Morgan Stanley, just to pick a random example here, are asking questions on earnings calls about pricing. They are also asking on behalf of a player that is actually going to invest quite substantial amounts of money, right? So there's that layer to the expectation story too. But to actually go to your question, I think, first of all, we need to stop these impulses, right? I mean, these gigantic cost shocks that then coordinate these kind of price hikes, if they can be arrested kind of in the onset, that I think would have made a huge difference. I think something like the strategic petroleum reserve, which of course eventually was mobilized in 2022, if that had been mobilized.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“We somehow think that firms look at the Fed and they kind of greet these signals from the Fed to anchor or de-anchor their inflation expectations. I'm not saying none of this is going on, but when I am reading the earnings calls, I don't see them talk about the Fed a lot. I see them talk about what their competitors are doing. I see them talk about rational pricing environments. I see them say things like this new force measure, like the winter storm Elliott, this has made our pricing environment even more conducive. So they are looking at their immediate environment. They are looking at our customers accepting of these price increases, which is a completely different set of expectations than what we think of when we talk about expectations in this kind of central bank-centered type of action.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, first on the wage part of that story, what we are seeing is basically eventually labor is trying to fight back against collapsing real wages as workers are basically losing purchasing power, right? But this is a very different story if you have an initial cost shock that comes from the energy market, that comes from commodity markets, comes from shipping, and so on, basically comes from upstream stuff. And then you have a propagation amplification of that shock as firms react by pricing over volume type of behavior, right? And then eventually labor goes like, wait a minute, like my purchasing power has collapsed and I'm trying to fight back to regain some of this lost territory, then this is a reaction to inflation rather than the origin of inflation. I think this really matters for how we think about what to do against inflation. But secondly, also, I mean, when we talk about expectations and expectation anchoring and so on,”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Is not willing to pay these prices, right? Like whether they actually can pay these prices or not, they might Just be deterred if prices suddenly go up for no obvious reason. Now, if there are obvious reasons, they seem to be more willing to accept these price increases. So therefore, both of these constraints quite dramatically soften in this emergency situation that we have been living through.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“My brand, but if I hear on the news in the radio, on TV that grain prices are exploding and I see pasta prices going up, it kind of makes sense. So there is, in other words, also a component of legitimacy in pricing behavior, right? It's something that in economic theory we have a very hard time capturing. It's not like people walk around with a budget constraint and a given set of preferences on their mind and like robots, they react to the price that they see. But they look at the context, right? So if in normal times or if in normal times there are basically two things that would constrain firms in their pricing behavior on the one hand competition, that is fear of losing market shares to their competitors, right? Which would happen if they start hiking prices in kind of a unilateral action, then that fear is kind of gone once these price hikes start to be more or less coordinated due to these emergency situations. And the second constraint would be fearing that customers”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“And then there is, I guess, the component that the excuse flatlation label is getting at, where from the perspective of the consumers, it's also more legitimate to see prices going up when there are clear reasons why they're going up. If you imagine you go to your favorite coffee shop every day and then from one day to the next, the coffee costs twice as much, then you would probably say like, oh somehow the guy who's running the coffee shop went nuts, right? If this guy says, I've been telling you over and over again that they are expecting a rent increase. And then you come back and the price of coffee goes up, you'll probably go like, oh yeah, of course makes sense, right? And something like this, but on a sectoral global level, I think has been going on. For example, in the food sector where no one can judge, I mean, you had this amazing episode on grain prices and prices of food items that use grain, right? And I mean, as a consumer, I don't know how much is the cost component of grain in my pasta, right?”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“To become more greedy. Which is a common critique of that. Yeah, right. Yeah, and quite frankly, I think that everybody agrees on that. Like, no one is saying that there has been this sudden grady impulse where firm leaders just became more greedy than they used to be, right? That is just not a good theory. So the question is, how can it be that in incredibly concentrated industries, we had decades of surprising price stability, right? Even like deflation in some periods. And now in the same highly concentrated kind of setup, we suddenly get this price over volume type of pricing behavior, right? And what we are arguing in our paper is that”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“So, what we are doing with this research, I think, is to kind of say, let's take the information that we have, however incomplete it still may be, and try to make sense why we are seeing what we are seeing. What we are seeing is that on earnings calls time and again, corporate leaders are saying that they can take pricing and that they can increase prices in ways that they might not even have expected and that they can increase prices even when volumes are going down, which is just against the logic of basic supply demand, right? We would expect that demand going up, prices going up and not the other way around. Now you might say, well, it's about the bottleneck and then demand is strong. So therefore it's still a demand kind of story. But then I would say, well, if I look at the earnings calls in the latest quarter, right, where clearly the bottlenecks for the most part have ceased and they are still taking price when volumes are going down, then clearly this is all.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, when economists talk about causation, they have very high standards, right? So I'm not yet there to say what I did is like a causa analysis just to put this out there as kind of a disclaimer. But I think this is kind of part of the challenge that we face because we are in a really unprecedented moment in the world, in the economy, in the global economy, right? And inflation is kind of part of that whole unprecedented moment. So you are getting these pieces of data that are coming out and you kind of have to reason on them. However incomplete the data might be. And if you just look at it from the perspective of your standard inflation paradigm, then you basically just look at money supply, aggregate demand, and maybe wages, and you don't look at all these other stuff that you guys have been reporting about for months and months and months, right? But if you sit in a corporate boardroom, then you are actually looking at all this other stuff. So then from your perspective, prices present themselves as something very different.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Many is, you know, there are different factors that people talk about driving inflation and obviously the tight labor market, fast wage growth, high levels of consumer demand, a lot of the supply chain bottlenecks that we've talked about over the years on the show, so the supply side factors, why is it important? Let's start with that to sort of like think about correct identification of different causes.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think it has been very surprising, especially since some of the key data on the profit margins actually already came out in the fourth quarter of 2021. And you guys have actually been covering that at the time. You were covering the profit margin explosion that happened at the same time as inflation started to take off. And in this by now probably infamous Guardian piece that I wrote, I actually started by saying there is so far pretty much undiscussed phenomenon, which is an explosion of profit margins that coincides with inflation. And we should take a closer look at that. So I think in many ways, when our paper came out at the beginning of this year, it has kind of been something that had been going on for a long time. And companies have been saying this on earnings calls for a long time. The groundwork folks have been calling this out for a long time, but now it really took off. So I guess one of my questions.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Thanks so much for having me back and it's a true pleasure to be here in person. Yeah, this is a treat. I didn't realize up until like five minutes ago that you were going to be on set. I thought we were going to look into this. Great till finally meet you. The first time we're”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Right, and it's funny because it's one of these things where, you know, economists are sort of like scandalized by sort of alternative ideas about inflation. And it's like they have certain things. Like some people say money supply, they say labor costs and wages, but it feels like on Wall Street there's kind of less mystery. It's like, no, they're like at least, you know, according to the people who read the calls, it's like, no, they're telling us they're willing to push price. And I guess the question is like, you know, well, there's lots of follow-on questions, but like, I think there's some really interesting policy ramifications from some of this identification.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, there was great episode that sort of helped me like analyze corporate earnings calls from then on and really like think about particularly in the consumer space where he had this thesis that companies are like very explicitly willing to sacrifice volume expansion in favor of higher prices and higher margins.”
2023-06-08 · Odd Lots · Isabella Weber on the Big Rethink of Inflation · IDENTIFIED FROM THE TRANSCRIPT · source