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Well, perhaps "no one" is an overstatement. "No one" seems to conveniently exclude those of us running businesses, juggling skyrocketing energy costs, and witne
by varispeed 3y ago
Well, perhaps "no one" is an overstatement. "No one" seems to conveniently exclude those of us running businesses, juggling skyrocketing energy costs, and witnessing first hand the daily impact of supply-side pressures. It seems "no one" in this context refers to those comfortably ensconced in the boardrooms of central banks and the ivory towers of the economically detached, where the nuances of different types of inflation are lost in a haze of aggregates and theoretical models.
By all means, let's keep simplifying complex economic phenomena to fit neatly within preferred policy approaches. It's much easier to adjust the monetary supply levers than confront the thorny reality of supply chain bottlenecks and surging commodity costs. After all, those dealing with these realities on a day-to-day basis – the small businesses, the consumers, the workers – they aren't "anyone", are they?
- s1artibartfast 3y agoSo let me clairify, supply and demand always exert influence. The question is which is a bigger factor at a given time. Supply constraints can be pushing prices up, but demand pressure can be pushing prices up MORE. If you look at your comodity costs, the question is if less of them are being produced than before, or similar numbers are being produced, but competition is willing to pay more for them. To take a look at something simple like beef, supply keeps going up year over year. Producers in general have a healthy profit margin. However, people are willing to pay more for beef. Would you call this a supply driven problem or a demand problem. You could do the same for energy costs.