Stuck at home, people have been unable to spend all their money and their bank-balances have swelled. But once they are vaccinated and liberated from the tyranny of Zoom, exuberant consumers may go on a spending spree that outpaces the ability of firms to restore and expand their capacity, causing prices to rise. The global economy already shows signs of suffering from bottlenecks. The price of copper, for example, is 25% higher than at the start of 2020.
I don’t really understand things like inflation – I mean, I know what it is, but with all macro stuff, it seems so outlandish and hard to prove causation that I don’t understand the mechanics.
The above sounds like a good example of that. I mean: really? People wanting to buy things is bad? Is the alternative better?