demand-pull inflation(redirected from Demand Inflation)
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A theory of inflation or price increases resulting from so-called excess demand. Related: Cost-push inflation.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
In Keynesian economics, a significant increase in prices that occurs when there is an increase in demand for goods and services such that the increase outpaces supply. The equivalent of demand-pull inflation can occur for any one product, but the term refers to situations where this happens throughout the economy. Demand may increase for a number of reasons; one example is an increase in the money supply. If persons have more money, they are more likely to buy goods and services which, in turn, drives up prices. One way to think of demand-pull inflation is to conceptualize it as too many dollars chasing too few products.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
demand-pull inflationsee INFLATION.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson
demand-pull inflationa general increase in prices caused by a level of AGGREGATE DEMAND in excess of the supply potential of the economy. At full employment levels of output (POTENTIAL GROSS NATIONAL PRODUCT), excess demand bids up the price of a fixed real output (see INFLATIONARY GAP). According to MONETARISM, excess demand results from too rapid an increase in the MONEY SUPPLY. See INFLATION, QUANTITY THEORY OF MONEY, COST-PUSH INFLATION.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005