Will the pandemic be inflationary or disinflationary? A look into the pandemic’s effect on all economic agents and their responses The pandemic. The impact it will have on the world is yet to be fully calculated. It has caused governments to issue lockdowns worldwide, urging millions to stay home in order to control the disease. The government is in conflict whether to put their focus on their population’s health or the economy, which has meant coming to a compromise that may lead to the pandemic becoming disinflationary in the long term, looking at various sources and analysis. The response to the pandemic as well as the message given to the general public has led to a fall in aggregate demand as well as a large rise in unemployment. When aggregate demand falls, it can mean low and even negative economic growth, which in turn leads to disinflation, and in its extreme, deflation. However, deflation is very unlikely, because as ‘the Economist’ (Anon., 2020) has pointed...