Sentence examples for demand-pull inflation from inspiring English sources

Alternatively, inflation in such countries may result from social and political pressures to provide employment for the overflow into the towns of a rapidly growing rural population; since there is a shortage of savings, this leads to excessive creation of new credit in one way or another and thus to a straightforward "demand-pull" inflation.

"Wage pressures have been rather modest up to this point," Mr. Fine said, "but part of the reason is that we are currently in a demand-pull inflation environment as opposed to a cost-pull situation, which means that wage upticks are likely to lag, rather than lead, overall increases in inflation.

Economists generally agree that there are two pressures that lead to higher inflation — higher wages, leading people to spend more and creating demand "pull" inflation — and higher prices for goods, through commodities or assets.

Inflation equals the first difference of the general price level, p, and is assumed to be a function of past inflation, expected future inflation, excess demand (4),10—reflecting demand-pull inflation tax increases, and cost-push (or mark-up) shocks, (v_t^{mathrm{p}}).11.11

In addition, demand-pull and cost-push factors (in particular increases in taxes) may affect inflation, begin{aligned} pi _t^{mathrm{p}}=omega ^{mathrm{p}} Epi _{t+1}^{mathrm{p}} + 1-omega ^{mathrm{p}}) pi _{t-1}^{mathrm{p}} - gamma ^{mathrm{p}} y_t^{mathrm{exc}} + 1-omega{mathrm{p}}(f_t-f_{t-1})+v_t^{mathrm{p}} end{aligned} (9).

Questions of whether prices are being pushed up by the labour unions ("cost push") or pulled up by excess purchasing power ("demand pull") have become the issues in the larger debate on inflation a controversy that is directly related to the debates in monetary economics mentioned earlier.

Typically, recessions have been caused by high interest rates imposed to fight excess demand and inflation.

Economics can tell use how to stimulate aggregate demand, estimate inflation and predict GDP.

When demand exceeds supply, inflation rises.

However, a stronger euro will also help to pull down inflation and so should allow the European Central Bank (ECB) to cut its interest rates, now at 2.75%, more quickly exactly what is needed to stimulate domestic demand.

Central banks cannot have adequate demand and low inflation.