While the central banks and the governments is not acknowledging it, the private bankers and economists are constantly labeling current inflation trend as the profit led inflation. This morning UBS comment https://www.ubs.com/global/en/wealth-management/insights/chief-investment-office/market-insights/paul-donovan/2023/does-growth-spill-over.html?caasID=CAAS-ActivityStream is just one example in this stream:
Euro-area consumers have suffered disastrously negative real wages for many months, and may now be reaching the limit of how far they are prepared to reduce savings. ECB Chief Economist Lane is speaking, after ECB President Lagarde said the inflation “monster” needed to be hit on the head. A club is a fairly blunt weapon, and there is a risk that Lagarde knock out the labor market and household incomes while ignoring the profit margins behind inflation.
My question is - what tools the central banks and the governments can use to tame the profit led inflation?
As far as I can understand then the private bankers suggest just doing nothing. In any case (both in the monetary tightening and in the do-nothing approach) the reasoning is that consumers will exhaust savings (i.e. convert their savings into the profit of companies) and then the consumers will stop spending, will reduce demand side and the inflation problem will be solved.
But one can argue, that savings-exhaustion approach is not the socially fair solution that maximizes the total welfare. That is why one can hope that there are tools that targets exactly profit led inflation. I have my ideas about technological advancements, education and about labeling schemes and information schemes, e.g. opening up the biggest profit takers and their mechanisms. But certainly, there should be some literture which I am seeking in my question.