Do Corporate Profits Increase When Inflation Increases?

Mathias Andler and Anna Kovner

No 20220713, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: When inflation is high, companies may raise prices to keep up. However, market watchers and journalists have wondered if corporations have taken advantage of high inflation to increase corporate profits. We look at this question through the lens of public companies, finding that in general, increased prices in an industry are often associated with increasing corporate profits. However the current relationship between inflation and profit growth is not unusual in the historical context.

Keywords: inflation; profits; industries; margin; prices (search for similar items in EconPapers)
JEL-codes: E31 G3 (search for similar items in EconPapers)
Date: 2022-07-13
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