The reason for the cost of things going up is due to the high demand and low supply. The laws of supply and demand show that when there is a high demand and low supply, the cost of those positions are worth more. The opposite when there is too much product and little demand.
After a disaster there is low production due to damage and low imports which is also due to damage, bad weather etc. This means that there is much less of supply of things such as food, water and essentials which make these products worth more as there is such a high demand for the small supply. This is the first wave after a disaster and the cost will go back down when the items start being produced and imported again, this does not usually take too long to get the supply back. If the crops are damaged, it may take much longer to get the prices back to the level that they were before the disaster.
There is a long-term increase is of things such as housing, cars and other higher value materials. As these things are likely to have been damaged and destroyed in a disaster there will be a high demand for them. This demand will obviously come after the demand for food, water and essentials. These higher value items take longer to produce and import so the price of them will remain high as the demand will remain high and the supply will remain low, growing much more slowly.
This demand will also decrease once the supply has evened out and according to the laws of supply and demand, the price of these items will even out.
This is why the cost of everything goes up in countries after a disaster.
After a disaster there is low production due to damage and low imports which is also due to damage, bad weather etc. This means that there is much less of supply of things such as food, water and essentials which make these products worth more as there is such a high demand for the small supply. This is the first wave after a disaster and the cost will go back down when the items start being produced and imported again, this does not usually take too long to get the supply back. If the crops are damaged, it may take much longer to get the prices back to the level that they were before the disaster.
There is a long-term increase is of things such as housing, cars and other higher value materials. As these things are likely to have been damaged and destroyed in a disaster there will be a high demand for them. This demand will obviously come after the demand for food, water and essentials. These higher value items take longer to produce and import so the price of them will remain high as the demand will remain high and the supply will remain low, growing much more slowly.
This demand will also decrease once the supply has evened out and according to the laws of supply and demand, the price of these items will even out.
This is why the cost of everything goes up in countries after a disaster.
