Share This Article:

Economic Definition of inflation causes. Defined.

Offline Version: PDF

Term inflation causes Definition: Inflation is a persistent increase in the economy's average price level. The two basic types (or causes) of inflation: demand-pull inflation and cost-push inflation. Demand-pull inflation, as the name clearly indicates, results when economy-wide shortages are created by increases in aggregate demand. Cost-push inflation results when an economy-wide shortages are created by decreases in aggregate supply, which are so named because they are more often than not triggered by increases in production cost.


« inflation | inflation premium »


Alphabetical Reference to Over 2,000 Economic Terms