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What causes cost-push inflation?

Cost-push inflation occurs when the rising price of input goods and services increases the price of final goods and services. For example, commodity prices spiked sharply during the pandemic as a result of radical shifts in demand, buying patterns, cost to serve, and perceived value across sectors and value chains.

How does inflation affect the economy?

By a continuing process of inflation governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.” – John Maynard Keynes, (1919) “The Economic Consequences of the Peace” Chapter VI, pp. 235-236. Most countries target low inflation – usually around an inflation rate of 2%

What are the costs of inflation?

An explanation of the potential costs of inflation - uncertainty, lost competitiveness, lower growth. Examples of how inflation can reduce real incomes and real savings. Also costs of hyperinflation.

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