What you describe is what happens in real life. It's called inflation. Maybe you want to be careful raising taxes in the first place. Not more than your citizen can afford. But I see your point, one must be able to pause the game to process the ripples some actions might cause.
So far I didn't plan interactions. Every citizen decides on his screen. If the baker raises the price of bread the other citizen have to pay. Obviously playing an excessively greedy baker will not make your settlement thrive as a whole.