Barak Orbach is the Robert H. Mundheim Professor of Law & Business at the University of Arizona James E. Rogers College of Law, where he serves as the founding director of the Business Law Program. Orbach’s primary areas of expertise are antitrust, corporate governance, regulation, the digital economy, and policy implications of artificial intelligence.
The United States has recently experienced shrinkflation. Many companies have downsized their products while keeping prices unchanged or even raising prices. Barak Orbach argues that misguided beliefs that failed antitrust policies enabled the decay of business morality have compromised the understanding of shrinkflation. The phenomenon typically arises when supply shocks or other factors inflate production costs in the economy and competitive pressures limit the ability of businesses to raise prices to pass on cost increases.
Some progressive politicians and advocates have argued that lax antitrust policies enabled the inflation surge that began in 2021 and that aggressive antitrust enforcement is crucial to combatting inflation. These assertions are misguided and misleading. Similar greedflation theories emerged during previous inflation spikes, but their promotion this time has proven counterproductive. The allure of trustbusting ideas, it seems, is starting to wane.
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