TheDemonBuer , 5 hours ago (edited 5 hours ago)

Bare shelves during the COVID-19 pandemic may have made inventory managers more conservative. That more conservative approach to inventories, in turn, could have generated a wider gap between output prices (where higher prices diminish end demand and therefore boost inventories) and input prices…Output prices rose significantly more than input prices, i.e., firms hiked margins, potentially as a mechanism to better conserve inventory…(Note that this potential driver of COVID-era margin expansion is distinct from and potentially more plausible than “greedflation.”)

Maybe it started out as inventory managers trying to conserve inventory due to uncertainty, but if you look at the charts, output prices spiked even after input prices had come down significantly, and after supply chains had normalized considerably. I think once the businesses saw that people were still buying at the higher prices, and the record profits they were making, they couldn’t turn down the opportunity. It was probably a combination of inventory management and greedflation. There’s no reason why it has to be only one or the other.