A list of puns related to "Demand pull inflation"
I am not an economist, or an expert in any way. This is my opinion and I want feedback/insight
After research on recent US trends, I think the Federal Reserve has it backwards. All the signs do point to demand pull inflation: higher costs, lowering unemployment, etc. They have put in places things to combat this, such as raising interest rates which would be the correct choice. I think instead we are in cost push.
Except the goods with the sudden increase price isnβt something like oil, but instead is workers. Due to things such as COVID, Recent politics, and r/antiwork, people have been demanding wages that match their work or the cost of living. This is why while unemployment is down, there is still a ton of job vacancies because people arenβt filing for unemployment. This supply shock of workers has caused costs to go up because large companies are not wanting to comply/are wanting to stay with how things are done.
This is just my opinion and I would love some feedback or hear what you all have to say.
Covid, Suez Canal, Colonial Pipeline hack, and the I-40 bridge shutdown are all events that are making it look like there is inflation due to the federal reserve's "money printing." I study a lot of economics and I fully agree with the Fed that any inflation will be "transitory" (due to temporary supply shocks). Meanwhile, many - if not most - investors and money managers are positioning themselves for a massive amount of inflation. It's not gonna come though. Actually, a more likely scenario is massive deflation. Whoever is on the other side of this popular trade will make a fuckton of money if that happens.
The conspiracy theory would be that Suez Canal blockage, Colonial Pipeline hack, and potentially even the I-40 bridge issue are attributable to a group that stands to profit from everyone being invested for inflation.
Hello, I have an assignment with the following requirement:
a) Describe the time period and rate of inflation.
b) Use a graph to illustrate the effects of demand pull inflation on the economy at that period of time
After extensive research, I'm coming pretty much empty.
What I found so far:
1916-1920 during WW1 when government expenditures on armaments greatly increased the circulating money supply;
1947-1948 just after WW2 because of the lift of price control and the return home of the army;
Late 60's and early 70's: Due toΒ the increase in Canadian government expenditures and the quantity of money and also because of theΒ large increase in U.S. govt expenditures.
But the information I posted is pretty much all I have found. Am I searching for the incorrect terms? Is anyone available to help me, or point me in the right direction?
Thank you in advance!
So UBI would give an income (like 1000 dollars) to everyone who lives in America, right? Wouldn't this resolve in a demand-pull inflation? Because if there's more money circulating, there would be a rising of demand, so prices would have to be higher, right? Am I missing something? I know there wouldn't be a need to print more money because we would cut spending on other things and there would be a VAT to cover that, but demand would rise nonetheless right? I think I'm missing something, I just don't know what.
Hello all, I am in year 9 and started my IGCSE course. I have an issue grasping this specific concept in inflation. Demand-pull inflation occurs when there is a lot of demand in an economy and not enough supply which drives up prices. It occurs due to increased consumption and investment. However, in the book, it states stimulating the economy by lowering taxes/interest rates can create spare productive capacity, therefore, preventing higher prices (inflation). My question is if increased consumption/investment can lead to demand-pull inflation and higher prices how does it also create spare productive capacity and keep prices low?
Why is cost-push inflation more serious than demand-pull inflation?
For those of you who don't understand inflation take this simple example into account.
If a fast food meal cost you $10 in 2021 and the inflation for 2021 is 5%, in 2022 the same meal should cost about $10.50.
Let's say you made $10/hr in 2021 and receive a .25/hr raise, or 2.5% going into 2022. That same fast food meal used to cost you an hour of work, now it cost more than an hour.
A minimal increase in this scenario but this will apply to virtually every purchase you make in 2022. This will add up significantly over time.
You should demand a raise at MINIMUM equal to inflation, but realistically should receive one ABOVE inflation. Anything BELOW inflation is a pay cut.
If you receive a raise below inflation start looking for a new job. I know this isn't an easy thing to do but the sooner you start the better.
A raise less than inflation is a pay cut, a raise equal to inflation is the same pay, a raise above inflation is an actual raise.
In the US we are currently on pace for 5-6%+ inflation during 2021.
Demand raises above inflation.
Edit: Credit to u/cubixy2k who down below commented that the best way to get a raise is to switch jobs. I couldn't agree more. As I said above I know it's not an easy thing to do but could be entirely worthwhile.
I mean, given that most goods have a fixed rate of generation, that is they have a fixed respawn rate, the only reason prices do not tend to zero in the long run is an increasing demand, right? Or at least a higher consumption rate than the rate of aggregate resource and gear harvesting.
Like is there an argument to say this is an inflation of monetary liquidity?
Edit: gamers break economics lmao Iβll give this some time and write the concluding remarks you guys give in the comments for later references.
Demand-pull inflation occurs when the price level rises as a result of an increase in aggregate demand.
Consider the case in which an increase in consumer optimism results in a corresponding increase in aggregate demand. As the demand curve shifts, the corresponding movement along the supply curve causes an inflationary gap.
Recall that an increase in output occurs as a result of the increase in the price level in the short run because firms have an incentive to increase real output when the prices of the goods they are selling are rising faster than the costs of the inputs
Note that demand is positioned beyond potential outputβan inflationary gap. It seems strange that the economy can operate beyond its potential, but it is possibleβtemporarilyβas firms encourage workers to work overtime, extend the hours of part-time workers, hire recently retired employees, reduce frictional unemployment through more extensive searches for employees, and so on. However, this level of output and employment cannot be sustained in the long run.
When real GDP rises above its potential, there is a tendency for inflation to rise. When real GDP is below its potential (as in a recession), there is a tendency for inflation to fall.
The 1970s and early 1980s witnessed a phenomenon known as stagflation, where lower growth and higher prices occurred together. Some economists believe that this situation was caused by a leftward shift in the supply curve, as shown in Exhibit 5. If the aggregate demand curve did not increase but the price level did, then the inflation was caused by supply-side forces, which is called cost-push inflation.
The increase in oil prices was the primary culprit responsible for the leftward shift in the aggregate supply curve. As we discussed in the last section, an increase in input prices can cause the short-run aggregate supply curve to shift to the left, and this spelled big trouble for the U.S. economyβhigher price levels, lower output, and higher rates of unemployment.
A negative supply shock like a sudden increase in input prices, such as an increase in the price of oil, shifts the supply curve to the left
After a negative supply shock, the price level rises and real output falls. Firms demand fewer workers as a result of higher input costs that cannot be passed on to consumers. This lower demand, in turn, leads to higher prices, lower real output, and more unemploymentβand a recessionary gap.
In the United States, these
As a young guy that wants to buy a 911, these prices, much like other goods such as watches (Rolex, AP, etc), are a huge turn off.
I feel like they have to level out like everything else does, but Iβm curious about everyoneβs thoughts in the coming years.
So, demand pull inflation occurs after a rise in AD? Got it.
Investment is a component of AD and is an injection into the circular flow of income, so an increase in Investment will raise AD and potentially cause demand pull inflation? Makes sense to me.
But I wonder about how you'd describe this practically? With Government spending, one can say that if public sector workers are paid more, they will spend more, thus demand increases. Or with higher export value, more countries are buying your goods, so their demand is increasing. But what is the actual connection between investment and AD figure?
So if the wage level increases that's an increase to input costs so aggregate supply contracts causing a movement upward along the aggregate demand curve to a new higher price level. But, on the other hand, an increase in wages leads to higher disposable income and so you get a rightward shift of the demand curve resulting in a movement along the supply curve to a new higher price level...
Is that sound? Does it really work like that? Most sources seem to characterize it as a type of cost-push inflation. Is there a reason for that? Does it act more immediately or drastically on the supply side of things or something? Thanks in advance!
Are any of you experiencing shortages and 15-25+% input cost spikes?
I'm in Aus, just wanted to check in with other bitcoiners.
Good luck out there, degen weather-gamblers.
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