Inflation has been a topic that's been scrutinized intensively, especially during the pandemic era as unexpected economic shifts have instigated fluctuating prices. In this article by the Brookings Institution, researchers analyze the factors contributing to this. One main factor contributing to this is disruptions in global supply chains, caused by other factors like supply shortages and increased production costs, increasing prices for consumers.
It also emphasizes on the role of stimulus measures in response to the pandemic, such as unemployment benefits and payments to individuals. Though these measures provided support to help households and businesses, it also increased the amount of inflation in the economy. There was also changes in consumer behavior like increased demand for certain goods/services. The Brookings Institution also analyzes other reasons behind the U.S. pandemic era inflation.
Link to the article: https://www.brookings.edu/articles/what-caused-the-u-s-pandemic-era-inflation/
ReplyDeleteOne thing I found interesting was how learning about the different drivers of recent inflation and how some factors were not the typical wage and price increases. One of the main factors they mentioned was actually how the "pandemic-induced kinks in supply chains and [created] a huge shift in demand." This reminded me about the larger tech companies and firm's who struggled with the supply chain during the pandemic. With different countires shutting down, I can only imagine how the supply chain's incrementing costs impacted the economy as companies had to work with manufacturers overseas that were shut down.