cost-pull inflation

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Definition
  1. Noun:
    • Inflation caused by rising production costs: "Cost-pull inflation" is a specific type of inflation that occurs when the overall price level in an economy rises due to increases in the costs of production. This includes higher expenses for raw materials, wages, or other inputs, which producers then pass on to consumers in the form of higher prices for finished goods and services.
Usage Examples
  • Noun:
    • The recent surge in energy prices has triggered a period of cost-pull inflation.
    • Economists are concerned that rising labor costs could lead to cost-pull inflation next quarter.
Advanced Usage
  • Economic Analysis: In economic theory, "cost-pull inflation" is often contrasted with "demand-pull inflation." It is a key concept for understanding the different drivers of price increases within an economy.
    • The central bank's report distinguished between the current demand-pull pressures and the potential for future cost-pull inflation from supply chain issues.
Variants and Related Words
  • Cost-push inflation: This is a synonymous term frequently used interchangeably with "cost-pull inflation" in economic discourse.
  • Stagflation: A related economic condition characterized by simultaneous cost-pull inflation, high unemployment, and stagnant demand.
Synonyms
  • Cost-push inflation: Inflation driven by increases in the cost of production.
  • Supply-side inflation: Inflation originating from increased costs on the supply side of the economy.
Related Phrases
  • Wage-price spiral: A related cyclical process where rising wages contribute to cost-pull inflation, which then leads to demands for higher wages.
    • The union negotiations risk initiating a wage-price spiral, a classic form of cost-pull inflation.
Noun
  1. inflation caused by an increase in the costs of production