A lot of economists agree that manufacturing and supply chain disruptions were the biggest factors in inflation. (Fewer goods available when there is new money in the economy means higher prices for goods). And don’t gorget the scarcity in the service economy. It was a lot harder to see lawyers, accountants, dentists, doctors, designers,…
A lot of economists agree that manufacturing and supply chain disruptions were the biggest factors in inflation. (Fewer goods available when there is new money in the economy means higher prices for goods). And don’t gorget the scarcity in the service economy. It was a lot harder to see lawyers, accountants, dentists, doctors, designers, architects, and mechanics during Covid. A lot of these folks raised their prices/fees, and those higher prices never came back down.
Most manufacturers reduced their product lines, and most have not re-expanded them. You can see this most easily in the grocery store.
What we all learned in high school is that a mix of fewer goods and services in the economy, combined with an increase in the money supply, yields inflation. Inflation comes down slowly as either demand slackens or one of those factors change.
But high prices on the other hand come down chiefly because of increased competition. We have unfortunately blunted that tool over the past 30 years by allowing far too much consolidation in the economy.
A lot of economists agree that manufacturing and supply chain disruptions were the biggest factors in inflation. (Fewer goods available when there is new money in the economy means higher prices for goods). And don’t gorget the scarcity in the service economy. It was a lot harder to see lawyers, accountants, dentists, doctors, designers, architects, and mechanics during Covid. A lot of these folks raised their prices/fees, and those higher prices never came back down.
Most manufacturers reduced their product lines, and most have not re-expanded them. You can see this most easily in the grocery store.
What we all learned in high school is that a mix of fewer goods and services in the economy, combined with an increase in the money supply, yields inflation. Inflation comes down slowly as either demand slackens or one of those factors change.
But high prices on the other hand come down chiefly because of increased competition. We have unfortunately blunted that tool over the past 30 years by allowing far too much consolidation in the economy.
Amen to that!
Since I live in both the US and the EU, Germany to be specific, I can attest to the commonality of economic problems.