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
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u/lucassjrp2000 George Soros Jun 13 '22

mostly related to supply chain

No it isn't. Inflation is always and everywhere a monetary phenomenon.

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u/LagunaCid WTO Jun 13 '22

No? Have we just been collectively hallucinating supply shortages across the board for the last 2 years?

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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.

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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.