This means that unlike in developed countries, where the role of finance and especially mortgage finance feeds is significant in terms of feeding into demand-pull inflation
, whereby the role of tight monetary policy basically increasing policy rate becomes highly relevant in reducing inflation; through squeezing the aggregate demand.
This won't be a demand-pull inflation
but a cost-push one.
That results in too much money chasing too few goods and causes demand-pull inflation
. A reversal of the practice should, therefore, contain inflation.
'Considering the previous erroneous projection in October, certainty becomes nil at best, and no assurance can ever be had either by the President or the public itself that high prices of goods and services will never happen, not to mention the fact that election spending will definitely exacerbate inflation in 2019, an election year, where demand-pull inflation
may likely occur,' said Escudero.
"Considering the previous erroneous projection in October, certainty becomes nil at best and no assurance can ever be had either by the President or the public itself that high prices of goods and services will never happen, not to mention the fact that election spending will definitely exacerbate inflation in 2019, an election year, where demand-pull inflation
may likely occur," the senator said.
One major criticism of a minimum wage hike is that it would result in demand-pull inflation
and complicate monetary policy.
'The results also revealed that there is a marginal increase in CPI due to demand-pull inflation
,' said the report.
This research supports the proposition of inflationary effects of fiscal and monetary policies as well as the theory of demand-pull inflation
(Fuddm, 2014; Kandil, 2005; Nguyen, 2015; Raji et al., 2014).
"We believe this rate hike cycle is likely to be a shallow one given still high indebtedness, a still present negative output gap and the absence of demand-pull inflation
In response to a question about which is more effective in the face of inflation, whether to raise interest rates or increase the reserve ratio, the FA Group said that there is a need to distinguish between two types of inflation: the first is caused by an increase in demand (demand-pull inflation
), and the second is caused by an increase in costs (cost-push inflation).
From this paradigm arises the question addressed in this article, namely, whether growth in labor compensation costs (a major component of the cost of production) is a predictive indicator of price inflation in components of final demand (cost-push inflation) or whether price inflation in components of final demand (i.e., consumer prices and finished-goods prices) is a predictive indicator of growth in labor compensation costs (demand-pull inflation
It considers the essential characteristics of the Chinese monetary economy, with comparison to those of the US; endogenous factors of the monetary policy transmission mechanism and the impact of changes in relative commodity prices, money circulation velocity, commercial bank loan supply, and the credit capacity of enterprises on monetary shock transmission; the impact of cost-push and demand-pull inflation
since the 1950s; and challenges and responses to China's monetary policy under the open economy.