Some of the notable examples of demand-pull inflation are discussed below:
3. Global Events
Another notable example that triggers demand-pull inflation is global events. For instance, the Russia-Ukraine war in 2022 increased the price of essential resources such as fuel and gas since their supply was scanty.
As a result, it caused an escalation in the prices of goods and raw materials. Consequently, with the increased costs, the consumers and business sectors had to pay more than usual.
From the above thoughts, one can understand that demand-pull inflation is a price rise caused when consumers' interest or total demand rises above productive capacity or total supply. Therefore, it is important to know the causes of demand-pull inflation to detect and tackle the situation.