Hidden price increases, product downsizing, and shrinkflation: a post-Keynesian macroeconomic perspective

Abstract This article takes a macroeconomic view of the industrial practice of marginally reducing the size/weight of goods or altering the content of goods or services without passing on the cost savings in prices. Although seldom a subject of academic study, this practice has come in for renewed attention with the recent return of inflation because it is one way of containing prices. Variously referred to as “hidden price increases,” “product downsizing,” or “shrinkflation,” it is part of a microeconomic strategy that has macroeconomic effects on both income distribution and consumer well-being.