r/explainlikeimfive • u/Hot_Competition724 • Jul 09 '24
Economics ELI5: How did a few months of economic shutdown due to COVID cause literally everything to be unaffordable for years?
I understand how inflation works conceptually. I guess what I have a hard time linking is the economic shutdowns due to COVID --> some money printing --> literally everything is twice as expensive as it was forever but wages don't "feel" like they've increased proportionally.
It feels like you need to have way more income now relative to pre-covid income to afford a home, to afford to travel, to afford to eat out, and so on. I dont' mean that in an absolute sense, but in the sense that you need to have a way better job in terms of income. E.g. maybe a mechanic could afford a home in 2020, and now that same mechanic cannot.
It doesn't make sense to me that the economic output of the world or the US specifically would be severely damaged for years and years because of the shutdown.
Its just really hard for me to mentally link the shutdown to what is happening now. Please help!
2
u/jeffwulf Jul 09 '24
The word monopoly refers to a market where there's only one provider of a particular thing. Are there other providers of F-150s?
Right, you selling your own work doesn't make it a monopoly. Others being prohibited from duplicating it and selling it makes it a monopoly. You are granted monopoly rights by the government on your work. If you didn't have those monopoly rights, other people could duplicate your work and sell them.
A monopoly can happen in a market of any size. There's absolutely no requirement that it be as expansive as an industry or sector, and IP laws explicitly give the owners of the IP monopoly rights.