Jaguar Land Rover to suspend output due to chip shortage
> What has made the auto industry particularly vulnerable is its reliance on just-in-time delivery, where parts are brought in when needed, rather than being stockpiled.<p>It's fascinating that the response is to close production rather than increase prices.<p>Those warning of inflation point to events like this as support. But inflation requires that higher producer costs be accepted by consumers.<p>And for that price transmission mechanism to work, there needs to be supply actually available at the higher price. It appears that just-in-time economics mean that in the event of a shortage your supply just goes offline. You don't get higher prices, just empty shelves.