The supply-chain problem involves both supply and demand, Bernanke said. Over the last few decades, America’s inventory management structure was “built around a fragile just-in-time” system. The weaknesses of this system have been exposed during 2022. “It can be broken up very quickly” if people start hoarding, he said.
But there is another dimension to what we’ve experienced since March 2020. Carney noted that much of the economy has adapted very well to the pandemic. In fact, total output now exceeds pre-pandemic levels, despite all the supply-chain and labor markets problems.