Please enable JavaScript.
Coggle requires JavaScript to display documents.
Inflation - Coggle Diagram
Inflation
consequences
decrease in consumer purchasing powers
shoe leather costs
worsen international competitevenes
uncertaintity
redistribution effect
people who receive fixed incomes - worse-off
people who receive incomes that increases at lower rate than inflation - worse-off
people who keep their savings in money assets - worse off
lenders - worse-off
borrowers - better-off
Government policies
contractionary economic policy
contractionary monetary policies
rising interest rates
decrease consumption spending and decrease investment spendig
decrease supply of money
suply-side policies might be used to deal with both types of inflation
decrease the inflationary pressure in the long-run
Demand-pull
increase in AD
expansionary demand-side policy
inflationary expectations
cost-push
increase in the prices of the factors of productions
increase in wages
increase in business taxes
increase in price of imported components or raw materials