supply shock

"Now, we have a situation that has been even more complicated because of a domestic supply shock."

A supply shock is an event that suddenly changes the price of a commodity or service.

But it would be wrong to think - and act - as if this crisis is fundamentally a supply shock.

Before the crisis occurred, the world's economy experienced a positive global supply shock.

Rather, it is a supply shock on top of blatantly excessive demand.

The supply shocks have known to play a dominant role in the regard of monetary policy.

Furthermore, price changes need not result from demand shifts; they can just as well follow supply shocks.

Today there is worry that the marvelous era of favorable supply shocks may have run its course.

"Since Monday, we've had a supply shock on top of a demand shock."

The rising demand for the drug, amid all of the supply shocks, has left patients with other illnesses suffering.

The negative supply shocks, and not policy, cut into consumer spending and job creation.

This reflects the fact that very strong, and unexpected, global oil demand growth, rather than supply shock, has been the driving force behind higher prices.

It is the costs of such a recession that likely causes governments and central banks to allow a supply shock to result in inflation.

If large volumes of federal oil were released at the early stage of a supply shock, it could temper those effects.

Now, however, these "favorable supply shocks" are disappearing.

Both the hurricane damage and higher energy prices amount to a "supply shock" that leads to higher costs.

Only one item on the list of anti-inflationary supply shocks remains: plummeting computer prices.

Friedman believed that for the most part, excluding very large supply shocks, business declines are more of a monetary phenomenon.

Back in the bad old 1970's, temporary supply shocks tended to produce higher inflation automatically.

In effect, land speculation creates a built-in supply shock, that squeezes the economy just as economic output increases.

A negative supply shock can cause stagflation due to a combination of raising prices and falling output.

A negative supply shock, like an oil crisis, lowers aggregate supply and can cause inflation.

"There's not really anything you can do about a supply shock, other than repair the damage," Mr. Harris said.

The advances in labor productivity are examples of positive supply shocks that cause disinflation and prosperity.

Unbeknownst to him, Pop Sullivan supplied shocks all summer.