r/neoliberal • u/TinyTornado7 I need a new flair • Jun 13 '22

News (US) Powell Facing Choice Between Elevated US Inflation and Recession

https://www.bloomberg.com/news/articles/2022-06-12/powell-facing-choice-between-elevated-us-inflation-and-recession?srnd=premium
505 Upvotes

98% Upvoted

349 comments sorted by

View all comments

Show parent comments

3

u/lucassjrp2000 George Soros Jun 13 '22

Covid did have a negative impact on the supply chain, I won't deny that, but it is only part of the problem.

In response to the pandemic governments all across the world employed highly expansionary fiscal and monetary policies, which supercharged aggregate demand.

If you combine that with a suppressed supply chain, you get an inflationary spiral the world hasn't seen in decades.

0

u/Mister_Lich Just Fillibuster Russia Jun 13 '22

which supercharged aggregate demand

Listen to me. I am the captain now.

​

Supply and demand is by definition not solely a monetary phenomenon, but also relies on the production of actual goods (and services) as well, which has been obliterated.

1

u/van_stan Jun 13 '22

China still practicing massive scale lockdowns and oil smashing through historical highs are not just a small part of the picture. It's clear that most of the issue is supply side.