Real Inflation in The Context of Shrinkflation and Skimpflation

Abstract

One of the most important issues of macroeconomics, which deals with the structure, performance, and behaviour of the economy, is inflation, the continuous increase in the general level of prices. Inflation can be expressed in numbers, but inflation is more than just numbers, both economically and socially. For this reason, inflation is one of the most important issues in the economic literature since it affects many parameters such as economic sustainability, income distribution, competitiveness, and purchasing power. In countries with high inflation, producers who are worried about the increase in costs make changes in the quality and quantity of products with high substitutes. This decrease in quality and quantity is not clearly reflected in inflation calculations. As the inflation rate increases, such practices increase. As a result, the fact that the consumer pays the same amount for a product that is less in quantity and of lower quality represents the part of inflation that is not considered. Therefore, there is a difference between the inflation rate and the inflation rate experienced by the society. While not adding the difference defines inflation, adding or subtracting this difference in quality and quantity defines real inflation. In this study, the concept of real inflation because of the concept of shrinkflation and skimpflation is analysed in the theoretical framework.