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"Passion and theology may sound odd put into the same sentence. But…if theology does not lead to passion about and for God it is useless. —J.I. Packer"

How Much Can the Supply Chain Explain the Rise of Inflation?

Aggregator by Aggregator
December 17, 2021
in Economy
How Much Can the Supply Chain Explain the Rise of Inflation?
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Only a few months ago, we heard that inflation was not a problem, that it would be a transitory condition at worst. We are now hearing from the Federal Reserve that inflation is a point of concern that requires significant action. Monetary authorities went very quickly from no big deal to we must act now.

We have also seen supply-chain explanations of why inflation has been rising lately. This explanation relates to long lines of containers waiting to be allowed to unload their cargo in ports, labor shortages, and a shortage of critical inputs such as chips needed to manufacture cars, among other things. Does the supply-chain explanation hold water? While a first look at the argument seems to make some sense, closer inspection suggests that this issue may not play a major role in a scenario of permanent inflation. Once again, inflation appears to be related to monetary policy.

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Source: AIER
Tags: busniesschainEconomygoodsgovernmentinflationmoneyservicessupply
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