If one sector runs into a hard upper limit to production, leading to scarcity-induced price inflation in that commodity, demand for all complementary commodities will decline. This has dramatic consequences, in that a fairly small number of resource constraints can seriously hamper a modern, highly interconnected economy. And this is not obvious from a purely supply-side picture.
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
