How America Responds to the Inflation Caused by Covid-19

Abstract

The Covid-19 pandemic has brought global inflation. Billions of people have been confined to their homes for months, unable to go to work. As an example, in the United States, which has the largest number of Covid-19 confirmed cases, the impact of the epidemic on their economy cannot is a big problem. According to the research, many of them contain the development of inflation by the Covid-19, but few papers research talk about the response of inflation for Covid-19 in U.S. central bank and the company overall. This research could serve as a model for other countries facing inflation. Therefore, this paper will use the background of the United States to explore the causes of inflation, the central bank's strategy, and how inflation reflects the difficulties faced by American companies. This paper mainly uses literature, case, and data analysis methods. Based on this paper, it was found that the fundamental factors of inflation were the imbalance of supply and demand and the break of the supply chain. But because of the Federal Reserves initial miscalculation about the duration of the Covid-19, they switched monetary policy from loose to tight in order to curb inflation. And American companies Apple and Amazon are both facing rising costs, labor shortages, and supply chain disruptions, but their solutions are different because of changing consumer preferences.