Big Think How COVID-era monetary policy changed everything | Joseph Politano
Aug 8, 2025
Joseph Politano, an economic analyst and data journalist at Apricitas Economics, discusses the seismic shifts in monetary policy caused by the COVID-19 pandemic. He highlights the economic upheaval brought on by supply chain shortages and soaring inflation, stressing how these issues have left consumers and businesses more uncertain than ever. Politano explains the transition from demand to supply constraints and emphasizes the need for understanding monetary policy to make informed decisions in these unpredictable times.
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Pre-2008 Demand-Constrained Economy
- Before the 2008 recession, the economy was demand-constrained with surplus capacity in goods and labor.
- Factories usually ran below full capacity to absorb demand surges, maintaining price stability and employment.
2008 Recession Demand Collapse Example
- During the 2008 recession, falling demand caused a sharp drop in new car sales, layoffs, and factory closures.
- This created a vicious cycle of demand shortfall and significant economic contraction with high unemployment.
Post-COVID Supply-Constrained Economy
- Post-COVID, the economy shifted to supply constraints rather than demand shortages due to global disruptions.
- Rapid demand recovery and limited supply capacity caused inflation to surge across many sectors simultaneously.