by Inflationary pressures can originate from the demand side or the supply side of the economy. Demand-side inflation, known as demand-pull inflation, becomes increasingly likely as the economy nears full capacity. Inflation driven from the supply side, referred to as cost-push inflation, is possible in the absence of any excess demand for goods and services.A supply shock can cause one-off price hikes, independently of demand conditions, but for the one-off effect to act as a catalyst for cost-push inflation there needs to be a socioeconomic process capable of reinforcing the initial effect and a pliant institutional setting. The most likely candidate is ongoing conflict over the distribution of income, expressed through workers’ wage demands and/or firms’ price-making behavior, with
Topics:
Mike Norman considers the following as important:
This could be interesting, too:
Robert Vienneau writes Future Papers For My Research Program?
Robert Skidelsky writes Full Employment, as the Hearth of the Cultural Economics of Orban
Matias Vernengo writes Debt cycles and the long term crisis of neoliberalism
Eric Kramer writes Biden: “Trump must bathe before the debate!”
Inflationary pressures can originate from the demand side or the supply side of the economy. Demand-side inflation, known as demand-pull inflation, becomes increasingly likely as the economy nears full capacity. Inflation driven from the supply side, referred to as cost-push inflation, is possible in the absence of any excess demand for goods and services.heteconomistA supply shock can cause one-off price hikes, independently of demand conditions, but for the one-off effect to act as a catalyst for cost-push inflation there needs to be a socioeconomic process capable of reinforcing the initial effect and a pliant institutional setting. The most likely candidate is ongoing conflict over the distribution of income, expressed through workers’ wage demands and/or firms’ price-making behavior, with endogenous credit accommodating the wage and price movements in nominal terms....
Cost-Push Inflation
Peter Cooper