Noah Smith and Erik Torenberg explore the factors contributing to rising grocery prices and the impact of inflation on consumer sentiment, as well as debunking misconceptions about inflation. Match a donation up to $100 for your favorite charity with GiveWell by going to https://givewell.org and pick “Podcast” and enter Econ 102 at checkout. We're hiring across the board at Turpentine and for Erik's personal team on other projects he's incubating. He's hiring a Chief of Staff, EA, Head of Special Projects, Investment Associate, and more. For a list of JDs, check out: eriktorenberg.com. -- Sponsors: GIVEWELL | NETSUITE Have you ever wondered where your donation could have the most impact? GiveWell has now spent over 15 years researching charitable organizations and only directs funding to the highest impact opportunities they’ve found in global health and poverty alleviation. Make informed decisions about high-impact giving. If you’ve never donated through GiveWell before, you can have your donation matched up to $100 before the end of the year, or as long as matching funds last. To claim your match, go to https://givewell.org and pick “Podcast” and enter Econ 102 at checkout. NetSuite has 25 years of providing financial software for all your business needs. More than 36,000 businesses have already upgraded to NetSuite by Oracle, gaining visibility and control over their financials, inventory, HR, eCommerce, and more. If you’re looking for an ERP platform head to NetSuite http://netsuite.com/102 and download your own customized KPI checklist. -- Econ 102 is a part of the Turpentine podcast network. To learn more: www.turpentine.co – LINKS: - Noahpinion on Substack: https://www.noahpinion.blog/ - Noah Smith, "Why are your groceries still so expensive?" on Substack: https://www.noahpinion.blog/p/why-are-your-groceries-still-so-expensive – X / TWITTER: @noahpinion (Noah) @eriktorenberg (Erik) – TIMESTAMPS: (00:58) Episode preview (03:00) The impact of inflation on consumer sentiment (07:08) Factors of inflation (13:52) The role of rent and monopoly power (15:26) SPONSOR: GIVEWELL (20:33) Wages and immigration impacting grocery prices (24:47) Grocery prices and supply chain snarls (25:52) SPONSOR: NETSUITE (27:15) Causes of inflation and deflation (31:04) Impact of aggregate supply and demand on inflation (34:25) Low & stable inflation (37:14) Erasing debt (42:17) How innovation affects inflation (51:09) Tech and real incomes (52:36) Inflation in the 80s and 90s (53:34) Expectation anchoring & inflation control (59:20) COVID and inflation expectations (01:04:37) Costless disinflation & manipulating expectations