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Definition of 'Cost-Push Inflation'
A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.
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Investopedia explains 'Cost-Push Inflation'
Cost-push inflation develops because the higher costs of production factors decreases in aggregate supply (the amount of total production) in the economy. Because there are fewer goods being produced (supply weakens) and demand for these goods remains consistent, the prices of finished goods increase (inflation).
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Video Definition
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Gain a deeper understanding of aggregate supply and demand, forces which raise the price of goods and services.
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As a measure of inflation, this index can help you make key financial decisions.
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What is inflation? This section breaks down the differest types of inflation, including stagflation and deflation, and breaks down the causes and costs of inflation.
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