Demand was always likely to rebound strongly as economies re-opened and confidence returned. Beyond this, though, there are reasons to think that we could now be in for a period of sustained strong aggregate demand in developed economies. Initially, this will be soaked up by spare capacity. But demand might stay strong even once economies return to full employment, potentially fueling inflation. This risk looks highest in countries which have seen the biggest policy stimulus and the smallest amount of pandemic-related economic damage, with the US most obviously fitting the bill.
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