Notes on the Current Inflation

  • Nathan Spero
Keywords: Political Economy


Both corporation heads and government economists, widely quoted in the news media, explain the current inflation as either "demand-pull" or "wage-push" or both. Under the "demand- pull" explanation, excessive effective demand for limited resources pulls prices upward. In "wage-push" inflation, overly large wage increases, in excess of rising productivity, push costs upward, forcing employers to raise prices. In any event, both explanations affirm that inflation is caused by working people having too much money. Both explanations assign to companies the role of unwilling participants in inflation, who are "pulled" or "pushed" into increasing prices.