This Week in... Inflation

Innovation & Tech Review Week 18/2022

The world is turning. And also, the venture world is moving forward.

The pandemic has exposed the weakness of global supply chains:

When sudden events like viral threats, natural disasters or war disrupt supply chains, the shortage of goods leads to rising inflation rates.

The mechanism is simple:

Over time demand and supply tend to move towards equilibrium in which no firm makes profits. All demand is fulfilled and all supply is purchased at the equilibrium price.

When supply goes down, prices rise and vice versa. When demand goes up, prices rise as well. But short-term markets can be disrupted.

Both scenarios lead to inflation since prices are rising.

But what causes such disruptions?

What causes inflation?

Why is that a problem?

And what is the way out?

What to know about the 6 main causes of inflation