@lovelylovely Well, in Australia at least, inflation is explicitly controlled/set by the government. The reserve bank board changes official rates to try and achieve a target rate of inflation.
They could choose to target zero, instead they deliberately target 2-3%.
In Australia inflation has nothing to do with corporations, only the government.
@sgryphon Im having trouble understanding this... So a business in Australia doesnt get to decide how much they charge for a good or service? Who decides? The government?
@ike the Reserve Bank has an explicit inflation target. The use monetary policy to set the official cash rates, which influences commercial lending rates, which indirectly affects the economy and prices, to achieve the inflation they want.
You can read the official government details here: https://www.rba.gov.au/inflation/inflation-target.html
Effectively, if inflation is high, they raise the rate to dampen the economy; and if inflation is too low (e.g. below 2%), they lower the rate to stimulate the economy. I don't think it is very effective, nor like the degree of government , interference in the market, but it is what it is.
The government does not directly dictate prices, but they do manipulate markets so the overall average inflation is 2-3%.
@sgryphon Thank you for the thoughtful reply. I was under the impression your claim was that the government directly managed inflation but this sounds like I misread what you were saying and they instead do what the US tries to do as well (manage cost of borrowing and the money supply) based on target inflation rates. Let me know if I got that wrong.