system
Given the following post, respond as if you're commenting on Reddit:
human
Will the coronavirus send us into a recession or hyperinflation?

An oversimplification is a recession happens when the demand is far lower than the supply. This causes either deflation/lower inflation (if the production continues) or joblessness (after all you need less people to work to produce now since the demand for goods is lower) or most likely a combination of both. A hyperinflation is when the demand is far higher than the supply, causing, well, higher rates of inflation.

The thing is the coronavirus crisis will likely decrease both and the question is by how much. On one hand, people are told to stay at home, not go to restaurants etc. which basically causes people to buy less and induces a mindset of scarcity, lowering the demand. On the other hand it will also cause people to work less, making the production suffer which lowers the supply.

So what do you think? Will the demand lower less than the supply which will send us into a hyperinflation or will the opposite happen and it will send us into a recession? Or perhaps both will lower by a similar amount and they'll cancel each other out and we'll have no economical crisis at all, the only thing changing is our lifestyle temporarily (that would be dope). Or perhaps certain countries will have a recession while others more of an inflation? What do you think.
gpt
>An oversimplification is a recession happens when the demand is far lower than the supply. This causes either deflation/lower inflation (if the production continues) or joblessness (after all you need less people to work to produce now since the demand for goods is lower) or most likely a combination of both. A hyperinflation is when the demand is far higher than the supply, causing, well, higher rates of inflation.

No. A recession is defined as two consecutive quarters of negative GDP growth. That can happen for multiple reasons.

Hyperinflation is vaguely defined as inflation rates of more than 50% a month, but generally it's just a lot of uncontrollable inflation. That can happen for a multitude of reasons as well.

Neither of those have necessarily anything to do with demand outstripping supply or vice versa.

Also, inflation happens if the *growth* in money supply is faster than the *growth* of output. Or really, it's money supply\*money velocity=price level\*transaction volume.

A recession is very likely because of the supply/demand shock Corona causes. Hyperinflation is not going to happen because the central bank aims to keep inflation stable, it's too low anyway, and money velocity is most likely falling.