demand-pull inflation

Demand-Pull Inflation

A situation in which inflation increases because of a continual increase in consumer demand.

Notes:

This type of inflation is simply a result of the interaction between supply and demand. As consumers demand a scarce good more and more, the price will inevitably increase. When this happens across the entire economy, inflation results.

See also: Cost-Push Inflation, Demand, Inflation, Scarcity, Supply

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Demand-pull inflation

A theory of inflation or price increases resulting from so-called excess demand. Related: Cost-push inflation.

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demand-pull inflation

Rising consumer prices resulting from the demand for goods and services exceeding supply. Demand-pull inflation is likely to enhance corporate profits because businesses are able to increase the prices they charge without corresponding increases in their costs. Compare cost-push inflation.