Price increases when demand exceeds supply are textbook economics. The question is whether, and how much, the pandemic yielded an excess take.The New York Times reports that textbook economics dictate that prices increase when demand exceeds supply. However, the question remains whether the pandemic has caused an excess take and to what extent. Vice President Kamala Harris has made corporate price gouging a key issue in her economic agenda for her presidential campaign, citing it as a major contributor to high grocery prices. This message has resonated with swing voters and progressive groups, who see price gouging as a major factor in rapid inflation. In response, Ms. Harris has announced her plan to call for a federal ban on corporate price gouging on groceries in an economic policy speech on Friday. However, the economic argument surrounding this issue is complex. While economists have identified various factors such as supply chain disruptions, changing consumer behavior, and increased demand from government stimulus as drivers of price increases, they argue that corporate behavior is not the main culprit. The Biden administration’s economists have found that while corporate behavior has played a role in driving up grocery costs, other factors have had a much larger impact. The Harris campaign has specifically pointed to consolidation in the meat industry as a cause of excessive grocery prices, but has not provided evidence or details on how their proposal would work. While there have been instances of companies admitting to raising prices to increase profits, the term “price gouging” can have different interpretations. The article content is currently unavailable, but readers are encouraged to enable JavaScript in their browser settings or subscribe to access all of The New York Times content. 

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