There is a common misconception that when supply chains are disrupted, entities along the supply chain shore up more resources to overcome the supply and demand imbalance.
With the excess cost ultimately passed onto consumers, this supposedly causes an inflationary ripple effect across the economy. A further myth is that this inflation then boomerangs onto the supply chain, leading to a vicious cycle.
When the global supply chain was disrupted during COVID-19 lockdowns in 2020, one ubiquitous component that had vast implications on the supply chain was the computer chip.
