Photo by Artem Beliaikin on Unsplash Production of boiler chickens (those raised for their meat, not eggs) in the US...
The COVID Supply and Demand Shock
The COVID-19 pandemic caused some of the fastest, biggest shifts of supply and demand curves in history. In this episode of the Econ Café 2020/21 podcast, authors Michael Mandel and Sean Flynn explains what it all means. First, we talk about how the demand schedule for oil shifted to the left because of the pandemic. The result was a sharp decline in oil prices. In the case of food, it was the supply curve that shifted to the left as the virus disrupted meat packing plants. But because supermarkets didn’t raise prices very much, we saw a gap between the quantity demanded and the quantity supplied the result with empty shells and temporary shortages.
Then we dive into the impact of COVID-19 on the supply and demand curves for college. On the supply side, most higher education institutions were able to pivot to online learning. On the demand side, we talk about two opposing forces. On the one hand, historically, students are more likely to stay in school during recessions, since jobs are harder to find. On the other hand, the riskier economy makes it less attractive to borrow money to pay for education. We end with Sean pointing out that the long-term prospects for college graduates are still good.
Questions/Discussion:
- How did the pandemic affect the supply and demand curves for oil?
- How did the pandemic affect the supply and demand curves for education?
- What other industries do you anticipate COVID-19 to impact in the long run and why?
Source: ECON Cafe 2020/21 – https://www.buzzsprout.com/1292186/5128546-the-covid-supply-and-demand-shock.
