Five main sources of inflation
1. Demand dynamic: Potential growth, output gaps, demand-pull inflation
Overview: Every economy has its own natural ”speed limit,” so to speak, that is determined by the nation’s productive capacity. Demand for production beyond this limit will typically translate into higher inflation as the excess demand bids up production prices.
Inflationary process: “Demand-pull” inflation usually leads to a general but uneven inflationary impact, with price pressures concentrated in…
To read more, please click the download link below.