Cost-and demand-induced inflation

Authors

  • F.A. LUTZ

DOI:

https://doi.org/10.13133/2037-3643/11958

Keywords:

Price level, inflation, wage increases, cost-induced, demand-induced, empirical evidence

Abstract

The current debate among economists concerning the origin of the continual rise in the general price level has resulted in two different explanations of this phenomenon. On the one hand is the view that wage increases, because they exceed increases in productivity, force the entrepreneur to raise prices - i.e. cost induced inflation. On the other hand is the view that inflation is demand induced. The present article aims to establish theoretically what economic phenomena a cost-induced and demand-induced inflation, respectively, may be expected to produce. This procedure provides criteria with which the author then uses to evaluate whether the empirical evidence points to the one or the other type of inflation.


JEL: E24, E31


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Published

2014-03-27

How to Cite

LUTZ, F. (2014). Cost-and demand-induced inflation. PSL Quarterly Review, 11(44). https://doi.org/10.13133/2037-3643/11958

Issue

Vol. 11 No. 44 (1958)

Section

Editorial

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