Several things are occurring at the same time — when you add them up, economically, it makes for a different world. The first is, we had a long deflationary environment during the pandemic with relatively little inflationary pressure. This was mostly a demand-constrained economy. Now, that’s changed and quite suddenly — today, supply is the problem. Supply is constrained since a good part of the deflationary environment seen over earlier years came from a burst of productive capacity in emerging economies which were entering the global market. This is much less powerful now while the global economy is much bigger, with millions of new consumers in emerging markets expanding the demand side. 

The second factor is, labour market behaviour has changed — many industries are having trouble recruiting with young people preferring to work in hybrid mode and many in stressful or dangerous jobs not wanting to return to these. The power of labour in a supply-constrained economy is rising, adding to the shift. Further, three scientific and technological transformations are occurring, which will shape a changed world with new rules. 

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