cost-push inflation

Discipline: Economics

Inflation that occurs due to an increase in one of the production factors, such as labor.

For example, when labor costs increase, the producers reflect that increase in costs to the prices. But with new increases in prices decrease the real value of wages, and workers demand higher wages. This spiral leads to inflation.

Also see:

· adaptive expectations
· administered pricing
· demand-pull inflation
· inflation
· mark-up pricing
· wage-price spiral

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