Demand is not the economy’s problem, supply is

Labour supply has also become an issue. The greater sensitivity of workers to health risks and lifestyle choices alter the propensity to work. Labour force participation has become less secure, fuelling record increases in job vacancies. Labour costs inevitably start increasing across-the-board.

COMING out of the 2008 global financial crisis, it took too many too long to recognise that the economic shock was more structural and secular rather than cyclical. The result was a policy response that, while effective in dealing with the immediate emergency, proved insufficient for longer-term economic well-being.

Covid-19 has amplified the vulnerabilities of the disappointing recovery that followed, particularly when it comes to socio-economic inequalities, co-opted institutions and distorted financial markets.