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