Cost-push and conflict inflation: the case of France between 2021 and 2023

Dimitri Goldztejn ()

No 110-2024, FMM Working Paper from IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute

Abstract: In this paper, we analyse the recent inflation period (2021-2023) in the case of France. We first study the cost-push dimension of inflation with an Input-Output price model (Leontief price model) using the methodology developed by Weber et al (2024) for the USA, which we extend to include the sensitivity of the CPI to import prices; this allows us to identify, in the case of France, the 'systemically significant' sectors as defined by Weber et al (2024) (after Hockett & Omarova (2016)). In the second part, based on detailed National Accounts data, we study the evolution of price components and value sharing, accounting for the sector heterogeneity of the dynamics. In this section, we also provide elements to the debate on 'profit inflation'. Based on the results obtained, it seems that the term 'cost-push-profit-led inflation' (Nikiforos et al (2024)) appropriately describes the phenomenon observed in France over the period studied. These results call for a rethinking and renewing of the policy toolbox against inflation. These considerations prove particularly relevant in the context of ecological transition, because of the various issues it raises: in terms of energy, raw materials and provisioning (Miller et al (2023)), but also of satisfying essential needs through the production and distribution of specific goods and services in a post-growth context (Doyal & Gough (1984), Briens (2015), Millward-Hopkins (2020), Durand et al (2024)).

Keywords: France; inflation; profit inflation (search for similar items in EconPapers)
Pages: 49 pages
Date: 2024
New Economics Papers: this item is included in nep-hme and nep-mon
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