> ...caused by actual supply constraints
Just curious, how would supply constraints lead to inflation? I'd expect lower supply would cause deflation
Just curious, how would supply constraints lead to inflation? I'd expect lower supply would cause deflation
When there's a supply constraint - not enough hamburgers to go around - the price of hamburgers goes up and as such there is inflation.
Inflation refers to the price of goods increasing.
If supply reduces and/or demand increases, all else equal, prices increase. If supply increases and/or demand decreases, all else equal, prices decrease.