2. Cost-driven inflation. Cost-driven inflation, also known as supply-oriented inflation, is an increase in the general price level caused by the increase in production costs of manufacturers. The reasons for the upward cost are as follows: (1) Wages are rising too fast; Increase in profit transfer; The price of imported goods has gone up.
3. Demand and cost-driven inflation. In fact, the cause of inflation cannot be a simple or single factor. The rise of price level driven by many factors at the same time is the inflation driven by demand and cost.
We can assume that inflation is driven by demand, that is, excessive demand leads to an increase in the overall price level, which in turn leads to an increase in wages, thus forming cost-driven inflation.
4. Expectation and inflation inertia. In practice, once inflation is formed, it will last for a period of time. This phenomenon is called inflation inertia, and one explanation for inflation inertia is that people will make corresponding expectations for inflation.
Extended data
Classification of inflation:
1, low inflation
Low inflation is characterized by slow and predictable price increases. It can be defined as inflation with an annual inflation rate of 1 digit. At this time, prices are relatively stable, and people trust money.
2. Rapid inflation
This kind of inflation will occur when the price level rises at the rate of 20%, 100% or even 200% every year. Once this inflation situation is formed and stabilized, there will be serious economic distortions. ?
3. hyperinflation
The most vicious Hyperinflation, money has almost no fixed value, and the price has been increasing. Its disastrous influence makes the market economy useless.
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