The main reasons for inflation are: (1) demand-driven inflation. Demand-driven inflation refers to inflation caused by excessive growth of total demand, that is, "too much money chasing commodities of different sizes". According to Keynes's explanation, if the total demand rises to a level greater than the total supply, excessive demand will cause a general rise in the price level. Therefore, any factor that increases aggregate demand may be the specific cause of demand-driven inflation.

(2) Cost-driven inflation. Inflation caused by cost or supply, that is, 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 movement of costs are as follows: wage transition; Increase in profit transfer; The price of imported goods has gone up.

(3) Inflation driven by a mixture of demand and cost. In practice, the cause of inflation is not single, and the price level that rises at the same time due to various reasons is inflation driven by mixed supply and demand.

It is assumed that inflation is driven by demand, that is, the increase of transitional demand leads to the rise of the overall price level, which in turn becomes the cause of wage increase, and then forms cost-driven inflation.

(4) Expectation and inflation inertia. In practice, once inflation is formed, it will generally 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.

Expectation means that people make estimates of future economic variables. Expectation is often based on the past inflation experience and the judgment of the future economic situation, to judge and estimate the future inflation trend, thus forming the expectation of inflation.