Look on the bright side. If it turns out to be a disaster of Black Death proportions, the survivors will be in a much stronger bargaining position in a post-plague labour market.
Rents and housing prices would certainly fall—possibly in some areas become free, though most legal systems today would have a problem with the.
Still, I think the point about the relative scarcity of labor to capital has a point so would expect an increase there even though aggregate demand will have fallen.
I don’t see why there would be more demand and less supply of labour after such a catastrophe. Why do you think that? (Or was it a joke? I cannot tell.)
I would rather say that the bright side is that a societal collapse brought on by a pandemic might at least delay the climate change collapse a bit.
I believe this is in reference to the changes in European economies during/after the Black Death, where typical incomes rose significantly. However, my understanding is that this happened mainly because most capital was in the form of land, which of course was unaffected by the plague. Thus, the ratio of capital to labor went up and the value of labor increased. In the modern world where agriculture is a relatively small part of the economy, it’s not at all clear that a reduction in population density would cause individual incomes to increase.
Look on the bright side. If it turns out to be a disaster of Black Death proportions, the survivors will be in a much stronger bargaining position in a post-plague labour market.
The demand for products (and indirectly for labor to produce these products) will fall too, won’t it?
Yeah, rents and housing prices would be a better example :-P
Rents and housing prices would certainly fall—possibly in some areas become free, though most legal systems today would have a problem with the.
Still, I think the point about the relative scarcity of labor to capital has a point so would expect an increase there even though aggregate demand will have fallen.
I don’t see why there would be more demand and less supply of labour after such a catastrophe. Why do you think that? (Or was it a joke? I cannot tell.)
I would rather say that the bright side is that a societal collapse brought on by a pandemic might at least delay the climate change collapse a bit.
I believe this is in reference to the changes in European economies during/after the Black Death, where typical incomes rose significantly. However, my understanding is that this happened mainly because most capital was in the form of land, which of course was unaffected by the plague. Thus, the ratio of capital to labor went up and the value of labor increased. In the modern world where agriculture is a relatively small part of the economy, it’s not at all clear that a reduction in population density would cause individual incomes to increase.
I see. Thanks!