4 ms·
You can't explain inflation as the widespread shortage of everything at the same time.
by aortega 5y ago
You can't explain inflation as the widespread shortage of everything at the same time.
- xadhominemx 5y agoAggregate demand is very high due to 1) global shift of consumer spend from services to goods, 2) global fiscal stimulus, 3) wealth effect from booming asset valuations (though this should be fading). Global supply is lower than it should be due to 1) low levels of capital investment over the past 3-5 years in several key industries (eg, semiconductors, US shale oil) for idiosyncratic reasons, 2) COVID-related reduction of port and air-transit capacity, 3) overall low levels of commercials capital investment in 2020 due to COVID-related financial prudence, 4) impact of the Ukraine invasion on oil and gas supply