Structured Lists Directory

Overview

Types of Inflation

Inflation is an economic phenomenon where the general price level of goods and services rises continuously over time. It is primarily classified into two types: demand-pull inflation and cost-push inflation. Demand-pull inflation occurs when aggregate demand exceeds aggregate supply, while cost-push inflation arises when short-run aggregate supply decreases due to rising production costs. Understanding these types is crucial for policymakers to implement effective inflation control measures and maintain economic stability.

inflation demand-pull cost-push economics price increase supply and demand macroeconomics
code slug name description causes characteristics
01 demand-pull-inflation Demand-Pull Inflation Inflation that occurs when aggregate demand exceeds aggregate supply. ["Increased consumer spending","Expansion of government spending","Investment surge","Export growth","Monetary easing policy"] ["Demand-driven","Accompanied by economic growth","Tendency toward employment improvement","Can worsen due to supply constraints"]
02 cost-push-inflation Cost-Push Inflation Inflation that occurs due to rising costs of production. ["Wage increases","Surging oil and energy prices","Rising raw material costs","Exchange rate depreciation","Cost increases from tighter regulations"] ["Supply-side factors","Not accompanied by economic growth","Decline in real wages","Risk of stagflation"]
03 built-in-inflation Built-In Inflation Inflation where past inflation expectations are reflected in current wage and price setting. ["Entrenched inflation expectations","Adaptive expectations","Wage-price spiral","Increasing index-linked contracts"] ["Self-reinforcing","Expectations-driven","Difficult to control","Spiraling vicious cycle"]

Classification of major types of inflation and their causes in economics.