Cost-Push Inflation

(1950s)

Examined by American and European economists in response to high inflation levels, cost push inflation refers to a rise in prices triggered by an increase in the costs of production (such as wages or commodity prices) in the absence of an increase in demand.

The phenomenon was experienced in the 1950s as wage rates jumped, and in the 1970s as oil prices soared.

Also see: administered pricing, demand-pull inflation, mark-up pricing, adaptive expectations

Source:
R J Gordon, 'Understanding Inflation in the 1980s', Brookings Papers on Economic Activity, vol. i (1985), 263-89;
W Thorp, The New Inflation (New York, 1959)

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