May refer to hold-ups in production for a business or supply constraints in the economy generally. They are caused by an inability to increase supply to match an unexpected surge in demand.
• Within an individual firm, bottlenecks might be caused by poor management planning: trying to rush more output through the factory than is possible using the available labour, material or capital resources.
• In the economy, bottlenecks occur when there is a boom. There may be shortages of skilled labour which make it difficult for firms to hire the kind of people they need in order to expand. This can lead to prices of scarce resources being bid up as buyers compete for them. This can be the start of acceleration in inflation. Or there may be shortages of other inputs, e.g. microchips, forcing producers of a huge range of products to slow down their rate of output