There are two main causes of inflation: demand-pull and cost-push. Both are responsible for a general rise in prices in an economy, but each works differently to put pressure on prices. Demand-pull conditions occur when demand from consumers pulls prices up, while cost-push occurs when supply costs force prices higher.
Some sources cite a third cause of inflation: expansion of the money supply. However, the Federal Reserve explains that the relationship of money supply to inflation has decreased over time, and is not a separate cause of its own.
There are two main causes of inflation: demand-pull and cost-push. Both are responsible for a general rise in prices in an economy, but each works differently to put pressure on prices. Demand-pull conditions occur when demand from consumers pulls prices up, while cost-push occurs when supply costs force prices higher.
Some sources cite a third cause of inflation: expansion of the money supply. However, the Federal Reserve explains that the relationship of money supply to inflation has decreased over time, and is not a separate cause of its own.