The economy is not very resilient to sudden disruptions

The economy needs time to adjust: to move capital and employment from one business sector or location to another, to change production technologies. When there is a sudden disruption, the economy does not know how to adjust quickly, and this change therefore generates scarcities and rationing, loss of potential production, and drastic fluctuations in relative prices as a result. In the recent period, there have been several sudden disruptions to which the economy has been unable to adapt: The shift in the structure of demand after the COVID crisis, resulting in the shortage of commodities, transport and semiconductors and the sharp rise in the relative prices of these goods and services; The loss of part of the commodities produced in Russia and Ukraine, resulting in the shortage of supply of these commodities, a sharp rise in their prices and production losses; The acceleration of the energy transition, which requires faster technological changes than companies are able to respond to, resulting in capital destruction and a loss of potential production.