Aside from the tragic deaths of some construction workers on the bridge, this accident shut down the Port of Baltimore, the 11th largest port in our country, Some $60 billion in goods move through the Port of Baltimore annually, but all of that activity has stopped because the collapsed bridge has made it impossible for ships to get to the port. It is unknown how long it will take to make to Port of Baltimore accessible again.

Question

If this accident were to cause inflation, which kind of inflation would it be?

Answer 1

Cost-push inflation would likely occur as a result of this accident. Cost-push inflation happens when the cost of production for goods and services increases, leading to higher prices for consumers. In this case, the shutdown of the Port of Baltimore would disrupt the supply chain, causing delays and increased costs for getting goods to market. This could result in higher prices for consumers as businesses pass on these added costs.