I am not quite sure how big the impact of it is on inflation. I thought even before, banks could just go and take cash from federal reserve (borrow), essentially unlimited amount and that counted as reserve. So, from practical point of view, if they saw that they can lend the money with foot risk/benefit profile, they could always do that. And they would not have to pay rate for the money which is in reserve. So, not quite sure if inflation depends on this much.
I think this is a reasonable argument. A lot of it seems to just have been companies using inflation as an excuse to raise prices causing more inflation.
Company does not need excuses. It needs explanation for shareholders, to show that they adjust the price to have maximum profits. Nearly no customer will look at the increased price of the product and think “it is expensive, so I can’t afford to buy it, but they have good excuse why it is expensive, so I will buy it anyway”.
I am not quite sure how big the impact of it is on inflation. I thought even before, banks could just go and take cash from federal reserve (borrow), essentially unlimited amount and that counted as reserve. So, from practical point of view, if they saw that they can lend the money with foot risk/benefit profile, they could always do that. And they would not have to pay rate for the money which is in reserve. So, not quite sure if inflation depends on this much.
I think this is a reasonable argument. A lot of it seems to just have been companies using inflation as an excuse to raise prices causing more inflation.
Company does not need excuses. It needs explanation for shareholders, to show that they adjust the price to have maximum profits. Nearly no customer will look at the increased price of the product and think “it is expensive, so I can’t afford to buy it, but they have good excuse why it is expensive, so I will buy it anyway”.