The Reserve Bank has wrongly dismissed corporate profiteering as a cause of inflation, according to new research, and instead continues to warn against a nonexistent wages breakout.

A paper by the Australia Institute, a progressive thinktank, has been published amid an intensifying debate over the causes and remedies to inflationary pressures that are weighing on households.

The research is critical of the stance taken by the RBA, led by the governor, Philip Lowe, and the methodology used to deny there has been profit-taking during the pandemic.

“Attempts to dismiss the role of excess profits is a dereliction of duty on the part of monetary policymakers,” said the paper, co-authored by economists Greg Jericho – who is also a columnist for Guardian Australia – and Jim Stanford.

“Workers have already paid once for the current inflation, through rapid erosion of their real wages. They are now being forced to pay again, through rising unemployment and further real wage cuts, in order to solve a problem they clearly did not cause.”

• Sign up for Guardian Australia’s free morning and afternoon email newsletters for your daily news roundup

Australia’s annual inflation is at 6.8%, a figure that has moderated recently but still sits well above the central bank’s 2% to 3% target. Food, power and rental prices are among the significant drivers, which are all major sources of pressure on households.

The RBA lifted borrowing costs at 10 consecutive meetings to 3.6% in a bid to dampen consumer demand for goods and services that surged in recent years. It then paused the hiking cycle in April.

Pent-up consumer demand has been magnified by issues in global supply chains, due to pandemic-related constraints on production as well as interruptions in the energy market caused by the Russian invasion of Ukraine.

But the impost on households, through higher borrowing rates, may not have been needed if companies didn’t take advantage of the pandemic and boost profits, according to the Australia Institute.

It’s a view also recently articulated by UBS’s London-based chief economist, Paul Donovan, who blamed “profit margin-led inflation”.

“Profit margin-led inflation is when some companies spin a story that convinces customers that price increases are ‘fair’, when in fact they disguise profit margin expansion,” he said.

The RBA has dismissed any role that profiteering may have played, despite a string of major Australian companies, including miners, supermarket chains, airlines and banks, recently posting high profits at the same time as household bills surged.

The RBA cites data that shows that, outside the mining and energy sectors, corporate profits in Australia have been unremarkable.

The central bank’s view is that energy prices are largely determined in world markets so Australian companies aren’t driving pricing decisions.

Given the high prices for Australian resources are largely paid for by offshore clients, such as Chinese steel mills, there has also been an argument that the mining sector isn’t driving inflation either.

“Rising profits are not the source of the inflation pressures we have,” Lowe told the National Press Club last week.

“I think what’s been happening is demand is strong enough to allow firms to pass on the higher input costs into prices. So the firms have not suffered a decline in their profits as their costs have gone up.

“That’s our interpretation of the data and we’ve looked at it very carefully.”

The Australia Institute, however, takes the central bank to task for ignoring the inflationary impact of the country’s dominant sector – mining – while also noting that there has been profiteering in strategically placed non-mining businesses.

While most fossil fuel products are not directly bought by Australians, they are inputs to the production of other goods and services, affecting prices for manufacturers, housing, transport and other services.

“The initial pulse of inflation resulting from fossil fuel price increases (and, to a lesser extent, other mineral products, such as iron ore) was thus transmitted through the whole economy, further boosting overall inflation,” the report said.

“They started chain reactions that have since spread into broader, persistent inflationary pressures.”

The debate is significant because it ties into the questions of which approach policymakers should take to combat inflation and whether it is acceptable for businesses that people rely on, such as supermarkets, to enjoy bloated margins at a time of high inflation.

The thinktank notes that there is evidence the window for profiteering is closing, as pent-up demand subsides and high fossil fuel prices abate.

“These positive developments will help reduce inflationary pressures; they will also be accompanied by an equally welcome moderation in corporate profits,” the report said, while noting there are concerns over recent curbs to global oil production.

The paper is at odds with RBA concerns over a potential wage price spiral, after Lowe warned last week that the country needs to avoid a pattern of “wages and price chasing one another” that could trigger further inflation.

The governor’s warnings come at a sensitive time, given there is a string of public sector wage negotiations coming up.