system
Given the following post, respond as if you're commenting on Reddit:
human
If inflation is the comparison of this year's price vs last year's price doesn't that mean that next year inflation will be much lower? Because we're comparing prices before the war in Ukraine and Supply Chain issues and next year we're comparing prices that already have this priced in?
gpt
For some prices like commodities where pricing is very flexible and moves around a lot, we could definitely see that. In reality, pricing is often very rigid for the vast majority of items. Once prices go up, they often stay up.

The single most important determinant of inflation is actually wages, which informs not just production cost but also income available to spend. Wages are also legendarily sticky. We are all very used to oil prices going up and down even day by day; but if our salaries were to go up and down even year by year we would lose our minds. There is a genuine cultural aversion to reducing somebody's salary even if they've done something wrong. It is generally easier to fire somebody than it is to reduce their salary.