2 ms·

I really want an opportunity to unpack this with a real economist, because it doesn't make any sense. How do you define a short supply of goods? We are far abov

I really want an opportunity to unpack this with a real economist, because it doesn't make any sense. How do you define a short supply of goods? We are far above the 2019 supply of goods in nominal terms, in real terms, in terms of shipping containers and actual ships and trucks moving. At what point it stops being a supply issue and becomes an issue of excess demand? And wouldn't this demand be fuelled further by the fear of goods costing more tomorrow than they cost today, again due to the accelerating inflation.

mohanmcgeek 5y ago
> We are far above the 2019 supply of goods in nominal terms You're looking at aggregate. There are specific types of goods, the lack thereof, that's driving up the CPI. Right now I hear the car prices in US are pretty high and the production is lower because of the chip shortage. The supply for a lot of other things is pretty elastic.
- vladimirralev 5y ago
  Again, how do you define a shortage? Chip production is way above the 2019 levels. Moreover the utilisation of the fabs, new and old processes combined is much higher[1]. Semiconductor fab worker count is at all time high, 10% above 2019. Why isn't this excess demand (caused by too much free money) as opposed to a "shortage"? [1] https://www.semiconductors.org/chipmakers-are-ramping-up-production-to-address-semiconductor-shortage-heres-why-that-takes-time/ https://www.semiconductors.org/chipmakers-are-ramping-up-pro...
  - mohanmcgeek 5y ago
    Car sales are down double digit percentage across the world and used call prices are up 30% > Why isn't this excess demand (caused by too much free money) as opposed to a "shortage"? It might very well be excess demand. The idea is that supply should always be elastic and grow to meet the demand. In this case it didn't. But this "excess demand" can't be attributable to lower interest rates because people, I imagine, aren't borrowing to buy these goods.

mohanmcgeek 5y ago

> We are far above the 2019 supply of goods in nominal terms You're looking at aggregate. There are specific types of goods, the lack thereof, that's driving up the CPI. Right now I hear the car prices in US are pretty high and the production is lower because of the chip shortage. The supply for a lot of other things is pretty elastic.

vladimirralev 5y ago
Again, how do you define a shortage? Chip production is way above the 2019 levels. Moreover the utilisation of the fabs, new and old processes combined is much higher[1]. Semiconductor fab worker count is at all time high, 10% above 2019. Why isn't this excess demand (caused by too much free money) as opposed to a "shortage"? [1] https://www.semiconductors.org/chipmakers-are-ramping-up-production-to-address-semiconductor-shortage-heres-why-that-takes-time/ https://www.semiconductors.org/chipmakers-are-ramping-up-pro...
- mohanmcgeek 5y ago
  Car sales are down double digit percentage across the world and used call prices are up 30% > Why isn't this excess demand (caused by too much free money) as opposed to a "shortage"? It might very well be excess demand. The idea is that supply should always be elastic and grow to meet the demand. In this case it didn't. But this "excess demand" can't be attributable to lower interest rates because people, I imagine, aren't borrowing to buy these goods.