The 2011 Thailand Floods: A Global Supply Shock
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The 2011 Thailand floods wiped out 20% of global hard drive production. Hard drive prices
in the UK doubled within weeks. A textbook negative supply shock. Production capacity destroyed,
aggregate supply shifts left, costs rise. UK tech retailers couldn't fulfill orders.
Small repair shops closed, couldn't source parts. Firms raised prices, feeding inflation.
The Bank of England faced a dilemma. Countries scrambled for alternative suppliers,
renegotiating contracts, premium shipping. One disaster rippled globally, impacting our inflation.
That's interdependence in action.
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