What Is Cost-Push Inflation: Meaning, Causes and Examples

What Does Cost-Push Inflation Mean?

What Are the Causes of Cost-Push Inflation?

What Are the Examples of Cost-Push Inflation?

FAQs About What Is Cost Push Inflation

How do the Indian government and monetary authorities control cost-push inflation? up-arrow

The Indian government introduces a deflationary fiscal policy, whereas the monetary authorities escalate the interest rates. As a result, it increases the borrowing cost and lessens customer spending and investment.

How does cost-push inflation differ from demand-pull inflation? up-arrow

Cost-Push Inflation arises due to an escalation in the price of inputs owing to the scarcity of production costs, resulting in a reduced supply of outputs. On the other hand, demand-pull inflation occurs as the aggregate demand upsurges faster than aggregate supply.

What are the types of cost-push inflation? up-arrow

Cost-push inflation is subdivided into wage-push Inflation, profit-push inflation, and material-cost-push inflation.

Who determines the cost-push inflation rate in India? up-arrow

According to the RBI Act 1934, the rate of inflation in India is decided by the Reserve Bank of India (RBI) and the Indian Government.