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I googled for a bit and wasn't able to find a definition for "demand shortage" specifically, so I can only guess at what it means, versus the intuitive idea tha
by downerending 6y ago
I googled for a bit and wasn't able to find a definition for "demand shortage" specifically, so I can only guess at what it means, versus the intuitive idea that "restaurants expected a certain level of demand, and those expectations have been dashed".
Does anyone understand the exact point being made?
- zozbot234 6y agoI think the established terminology is more like "demand shortfall". In a general (non-sector-specific) economic context, this almost always refers to a fall in demand for all goods or services that introduces severe frictions into the workings of the market mechanism itself, and that can thus be "solved" in a comparatively straightforward way by addressing these frictions. The "liquidity constraints" discussed in the abstract may be one such friction, but it's quite common for agents to be liquidity-constrained or unwilling to incur debt even irrespective of any negative supply-shock, so it's not quite clear to me what points the paper is trying to make.
- downerending 6y agoWhelp, I guess that's why I call myself an amateur. Thank you for your attempt. :-)