Economic Tidbits

Hmmm…

“The most important thing [to recognize]”, says Malcolm Penn, who runs Future Horizons, a chip-industry consultancy, “is that shortages are a natural part of the industry.” Chipmaking, he says, is a good example of what economists call a ‘pork-cycle’ business, named for the regular swings between under- and over-supply first analyzed in American pork markets in the 1920s. As with pigs, the supply of chips cannot quickly react to changes in demand.

Computer chips. Loading, please wait. The Economist, May 22nd, 2021.

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