> because of falls in consumer confidence and consumption.
The current crisis is supply side driven. If you see a fall in consumer confidence it’s just because the media keeps repeating it’s going to be terrible like this article.
Part of me can’t stop thinking this started exactly when employee bargaining power was starting to improve and employment was historically low. I might be getting paranoid however.
> The current crisis is supply side driven. If you see a fall in consumer confidence it’s just because the media keeps repeating it’s going to be terrible like this article.
These are two incompatible views. A supply side driven crisis means there is a shortage of goods. In this case, the shortage is driven by sanctions (whereas previously it was driven by covid restrictions). In both cases, it is a lack of stuff available to buy, leading to inflation and business shutting down because their costs of energy, food, and other essentials are too expensive. It has nothing to do with Narrative or Media (although one can argue that Narrative and Media is what drove the public policy response which created the sanctions that led to the contraction).
When we talk about Media and Narratives hitting ordinary consumers, that is a demand-led recession, not a supply-led recession, although the evidence of Narratives creating artificial demand-led recessions in the real world is quite weak. Most business (and consumers) respond to how much money is in the till at the end of the day, not to media reports about economic surveys.
It’s not incompatible. It’s exactly what I’m saying. We are manufacturing a demand side crisis by incorrectly presenting a supply side one. We could be reading about what’s being done to alleviate the energy market pressure, how reshoring will improve supply chain or the historically low unemployment rates. Instead it’s all about consumers insecurity, how “it’s going to be terrible, brace for it” and the risk of spiralling inflation.
I don’t think it’s factually correct to present the crisis as mostly sanctions related by the way even if they play a part. It’s both the energy market and the situation in China.
I disagree about the evidence. We have known for a long time than actors anticipate economic movement based on the information they are given. It’s even been argued that it’s the sole lever of monetary policies in the short term.
The current crisis is supply side driven. If you see a fall in consumer confidence it’s just because the media keeps repeating it’s going to be terrible like this article.
Part of me can’t stop thinking this started exactly when employee bargaining power was starting to improve and employment was historically low. I might be getting paranoid however.