The US Economy Is Not In 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 isn’t 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 aren’t 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.

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πŸ‘€︎ u/mcak645x
πŸ“…︎ Jan 12 2022
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Is the extreme inflation that a country like Argentina has (because of all the money that the central bank prints) demand-pull inflation? With demand-pull inflation I refer to the idea of too much money chasing too few goods.
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πŸ‘€︎ u/fuufufufuf
πŸ“…︎ Jan 18 2022
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Why is the Supply line a curved line instead of a straight line? (demand-pull inflation diagram)
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πŸ“…︎ Sep 25 2021
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What contributes to hyperinflation globally on a wider scale - demand pull or cost push inflation?
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πŸ“…︎ Oct 27 2021
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Persistent Demand-Pull Inflation is Unlikely in Demand-Led Economies heteconomist.com/persiste…
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πŸ‘€︎ u/aldursys
πŸ“…︎ Jun 28 2021
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Many separate events are 'coincidentally' setting up the economy to look like demand-pull, monetary inflation is upon us. It isn't.

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.

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πŸ‘€︎ u/mcndjxlefnd
πŸ“…︎ May 21 2021
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DEMAND-PULL INFLATION CANADA

Hello, I have an assignment with the following requirement:

  1. Conduct research to find a period in Canadian history that experienced demand pull inflation.

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!

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πŸ“…︎ Jul 13 2021
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Inflation: Cost-push or Demand-pull? youtu.be/X2N6AxIk6Dw
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πŸ‘€︎ u/Punchny
πŸ“…︎ May 14 2021
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Is inflation in developing countries like Argentina and Venezuela demand-pull based?
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πŸ‘€︎ u/fuufufufuf
πŸ“…︎ Feb 23 2021
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I was watching someone talking about demand-pull inflation, and I thought of ubi

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.

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πŸ‘€︎ u/notPlancha
πŸ“…︎ Jul 28 2020
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CIE: (0445) Economics Help Regarding Demand-Pull Inflation

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?

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πŸ‘€︎ u/Channies
πŸ“…︎ Mar 17 2020
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[Highschool Economics] Why is cost-push inflation more serious than demand-pull inflation?

Why is cost-push inflation more serious than demand-pull inflation?

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πŸ‘€︎ u/rishirk
πŸ“…︎ Jul 15 2020
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LPT if you don't get a raise equal to inflation you're taking a pay cut. If you get a raise equal to inflation you're being paid the same. Demand a raise above 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.

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πŸ‘€︎ u/blehnder
πŸ“…︎ Dec 05 2021
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Differences Between Cost Push Inflation And Demand Pull Inflation totalassignmenthelp.com/f…
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πŸ‘€︎ u/Jamessmith0123
πŸ“…︎ Jul 23 2019
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Is the inflation of gold in PC servers the result of an excess in demand of goods or an excess of gold in circulation?

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 I’ll give this some time and write the concluding remarks you guys give in the comments for later references.

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πŸ‘€︎ u/acopicshrewdness
πŸ“…︎ Jan 02 2022
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Demand Pull, Cost Push Inflation
  • 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 outputβ€”an inflationary gap. It seems strange that the economy can operate beyond its potential, but it is possibleβ€”temporarilyβ€”as 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. economyβ€”higher 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 unemploymentβ€”and a recessionary gap.

  • In the United States, these

... keep reading on reddit ➑

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πŸ‘€︎ u/wumzao
πŸ“…︎ Jul 19 2019
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Just as Fed starts to talk a big game, OECD leading indicators are turning down… the world economy is slowing… and rate increases will only exacerbate the situation… this may slow demand, but in an increasingly capacity constrained world, will it do anything to slow inflation?
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πŸ‘€︎ u/silvertomars
πŸ“…︎ Jan 16 2022
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Never before have worker wages increase by so little relative to corporate profits… with labor shortages everywhere and sky-high inflation, expect workers to demand a larger share of those profits… and so the wage/price spiral begins… and profit margins will get squeezed…
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πŸ‘€︎ u/silvertomars
πŸ“…︎ Jan 16 2022
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We’ve read a lot on here about the inflation of 911 prices on here, what do you guys think will happen? Will it level back out in the next few years, or perhaps this is the new demand given the future with EV?

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 I’m curious about everyone’s thoughts in the coming years.

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πŸ‘€︎ u/TyroneWiggums
πŸ“…︎ Jan 09 2022
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β€œInflation is normally a sign of increasing demand and a reasonably healthy economy. The inflation we are getting now is not. It is grounded in debt and a currency debasement war. Hard assets is the way to go. DO NOT MISS THE COMMODITIES BULL as it will literally save your life.” - Graddhy
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πŸ“…︎ Jan 11 2022
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How would investment lead to an increase in demand pull inflation?

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?

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πŸ‘€︎ u/Astronomer_X
πŸ“…︎ Jan 03 2019
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Immigration Doesn’t Actually Solve Inflation (In Fact, It Creates a Positive Labor Demand Shock) peri.umass.edu/publicatio…
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πŸ‘€︎ u/Scoffed-Gherkin
πŸ“…︎ Dec 13 2021
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Is inflation caused by rising wages cost-push or demand-pull? Or a little of both?

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!

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πŸ‘€︎ u/SenseiMike3210
πŸ“…︎ Mar 31 2016
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Food inflation soon or does demand die first? Any other farmer bitcoiners?

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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πŸ‘€︎ u/Heenicolada
πŸ“…︎ Jan 19 2022
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Supermarkets facing 'perfect storm' amid inflation, demand surge: Grocery chain CEO foxbusiness.com/media/sup…
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πŸ‘€︎ u/saurin212
πŸ“…︎ Jan 12 2022
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β€œWhy do we accept inflation? Why don’t we demand more from our federal government? 6.3% in 2 years. 172.8% in my lifetime. Every year our dollar is worth less. There is no rebound. There is only 1 fix for this.. Bitcoin.” Scott Conger, Mayor of the city of Jackson, Tennessee. news.todayq.com/news/tenn…
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πŸ‘€︎ u/ControlPotential
πŸ“…︎ Jul 16 2021
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Minimum Wage, forever student loan debt, rising housing cost, inflation, on top of conservative, centrist, and neoliberal gaslighting, more rising cost of living expenses, and a third of the populace who denies it all. Let's not mention anarchy just yet but OUR DEMANDS will not be met through peace!
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πŸ‘€︎ u/The_Beard_Hunter
πŸ“…︎ Dec 03 2021
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ECB Staff Union Demands More Pay to Guard Against Inflation bloomberg.com/news/articl…
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πŸ‘€︎ u/coinsrus101
πŸ“…︎ Nov 25 2021
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Cost-Push Inflation, Stagflation and Demand-Pull Inflation econtutorials.com/blog/co…
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πŸ‘€︎ u/marjankhan
πŸ“…︎ Aug 15 2014
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Are the effects on an economy different with cost push inflation vs demand pull inflation? Which is the US experiencing now?
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πŸ‘€︎ u/chowto
πŸ“…︎ Apr 25 2021
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Are the effects different to an economy if it has cost push inflation vs demand pull inflation? Which type is the US experiencing now?
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πŸ‘€︎ u/chowto
πŸ“…︎ Apr 25 2021
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Eli5: What type of inflation do developing countries like Argentina and Venezuela have? Is it demand-pull inflation?
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πŸ‘€︎ u/fuufufufuf
πŸ“…︎ Mar 04 2021
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Is the inflation generated by printing money (increasing the money supply) usually demand-pull?
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πŸ‘€︎ u/fuufufufuf
πŸ“…︎ Aug 25 2020
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