Inflation
This document was uploaded by user and they confirmed that they have the permission to share it. If you are author or own the copyright of this book, please report to us by using this DMCA report form. Report DMCA
Overview
Download & View Inflation as PDF for free.
More details
- Words: 784
- Pages: 35
Inflation
Inflation
Inflation in practice
Inflation rates in selected industrial countries
26
UK
Inflation (% increase in retail prices)
24 22 20 18 16 14 12 10 8 6 4 2 0 -2 1965
1970
1975
1980
1985
1990
1995
2000
Inflation rates in selected industrial countries
26
UK
Inflation (% increase in retail prices)
24 22 20 18 16 14 12 10 8 6 4 2 0 -2 1965
1970
1975
1980
1985
1990
1995
2000
Inflation rates in selected industrial countries
26
UK EU 15
Inflation (% increase in retail prices)
24 22 20 18 16 14 12 10 8 6 4 2 0 -2 1965
1970
1975
1980
1985
1990
1995
2000
Inflation rates in selected industrial countries
26
UK EU 15
Inflation (% increase in retail prices)
24 22 20 18 16 14 12 10 8 6 4 2 0 -2 1965
1970
1975
1980
1985
1990
1995
2000
Inflation rates in selected industrial countries
26
UK EU 15
Inflation (% increase in retail prices)
24 22
USA
20 18 16 14 12 10 8 6 4 2 0 -2 1965
1970
1975
1980
1985
1990
1995
2000
Inflation rates in selected industrial countries
26
UK EU 15
Inflation (% increase in retail prices)
24 22
USA
20 18 16 14 12 10 8 6 4 2 0 -2 1965
1970
1975
1980
1985
1990
1995
2000
Inflation rates in selected industrial countries
26
UK EU 15
Inflation (% increase in retail prices)
24 22
USA Japan
20 18 16 14 12 10 8 6 4 2 0 -2 1965
1970
1975
1980
1985
1990
1995
2000
Inflation rates in selected industrial countries
26
UK EU 15
Inflation (% increase in retail prices)
24 22
USA Japan
20 18 16 14 12 10 8 6 4 2 0 -2 1965
1970
1975
1980
1985
1990
1995
2000
Inflation rates in selected industrial countries
26
UK EU 15
Inflation (% increase in retail prices)
24 22
USA
OECD
Japan
20 18 16 14 12 10 8 6 4 2 0 -2 1965
1970
1975
1980
1985
1990
1995
2000
Inflation rates in selected industrial countries
26
UK EU 15
Inflation (% increase in retail prices)
24 22
USA
OECD
Japan
20 18 16 14 12 10 8 6 4 2 0 -2 1965
1970
1975
1980
1985
1990
1995
2000
Inflation
Aggregate demand, aggregate supply and the price level
Aggregate demand and aggregate supply
Price level
AS
Pe
AD O National output
Aggregate demand and aggregate supply
Price level
AS
Pe P2
b
a AD
O National output
Inflation
Demand-pull and cost-push inflation (a) demand-pull inflation
Demand-pull inflation
Price level
AS
P1
AD1 O
Q1 National output
Demand-pull inflation
Price level
AS
P1
AD2 AD1 O
Q1 National output
Demand-pull inflation
Price level
AS
P2 P1
AD2 AD1 O
Q1
Q2
National output
Inflation
Demand-pull and cost-push inflation (b) cost-push inflation
Cost-push inflation
Price level
AS1
P1
AD O
Q1 National output
Cost-push inflation AS1
Price level
AS2
P1
AD O
Q1 National output
Cost-push inflation
Price level
AS2
AS1
P2 P1
AD O
Q2
Q1 National output
Inflation
The interaction of demand-pull and cost-push inflation
The interaction of demand-pull and cost-push inflation
Price level
AS1
P1
AD1 O National output
The interaction of demand-pull and cost-push inflation
Price level
AS2
AS1
P2 P1
AD2 AD1 O National output
The interaction of demand-pull and cost-push inflation AS3 AS
Price level
2
AS1
P3
P2
AD3
P1
AD2 AD1 O National output
Inflation
The interaction of demand-pull and cost-push inflation (a) an initial increase in aggregate demand
Initial demand-pull inflation Subsequent supply response
Price level
AS1
P3
d
P2 P1 P0
AS
c b a AD2 AD
O National output
AD1
Initial demand-pull inflation Subsequent demand response
Price level
AS1 P4 P3
e d
P2 P1 P0
AS
c b a AD3 AD2 AD
O National output
AD1
Initial demand-pull inflation AS2 AS1 f
Price level
P5 P4 P3
e Subsequent supply response
d
P2 P1 P0
AS
c b a
AD3 AD2 AD
O National output
AD1
Initial demand-pull inflation
Price level
AS2 g
P6 P5
f
P4 P3
d
e
P2 P1 P0
AS1
AS Subsequent demand response
c b a AD3 AD2 AD
O National output
AD1
AD4
Inflation
The interaction of demand-pull and cost-push inflation (b) an initial reduction in aggregate supply / increase in aggregate costs
Initial cost-push inflation
Price level
AS2 AS1
P3 P2 P1 P0
AS
d c b a
Subsequent demand response
AD O National output
AD1
Initial cost-push inflation AS3
Price level
AS2 AS1
P4 P3 P2 P1 P0
e
AS
Subsequent supply response
d c b a
AD O National output
AD1
Inflation
Inflation in practice
Inflation rates in selected industrial countries
26
UK
Inflation (% increase in retail prices)
24 22 20 18 16 14 12 10 8 6 4 2 0 -2 1965
1970
1975
1980
1985
1990
1995
2000
Inflation rates in selected industrial countries
26
UK
Inflation (% increase in retail prices)
24 22 20 18 16 14 12 10 8 6 4 2 0 -2 1965
1970
1975
1980
1985
1990
1995
2000
Inflation rates in selected industrial countries
26
UK EU 15
Inflation (% increase in retail prices)
24 22 20 18 16 14 12 10 8 6 4 2 0 -2 1965
1970
1975
1980
1985
1990
1995
2000
Inflation rates in selected industrial countries
26
UK EU 15
Inflation (% increase in retail prices)
24 22 20 18 16 14 12 10 8 6 4 2 0 -2 1965
1970
1975
1980
1985
1990
1995
2000
Inflation rates in selected industrial countries
26
UK EU 15
Inflation (% increase in retail prices)
24 22
USA
20 18 16 14 12 10 8 6 4 2 0 -2 1965
1970
1975
1980
1985
1990
1995
2000
Inflation rates in selected industrial countries
26
UK EU 15
Inflation (% increase in retail prices)
24 22
USA
20 18 16 14 12 10 8 6 4 2 0 -2 1965
1970
1975
1980
1985
1990
1995
2000
Inflation rates in selected industrial countries
26
UK EU 15
Inflation (% increase in retail prices)
24 22
USA Japan
20 18 16 14 12 10 8 6 4 2 0 -2 1965
1970
1975
1980
1985
1990
1995
2000
Inflation rates in selected industrial countries
26
UK EU 15
Inflation (% increase in retail prices)
24 22
USA Japan
20 18 16 14 12 10 8 6 4 2 0 -2 1965
1970
1975
1980
1985
1990
1995
2000
Inflation rates in selected industrial countries
26
UK EU 15
Inflation (% increase in retail prices)
24 22
USA
OECD
Japan
20 18 16 14 12 10 8 6 4 2 0 -2 1965
1970
1975
1980
1985
1990
1995
2000
Inflation rates in selected industrial countries
26
UK EU 15
Inflation (% increase in retail prices)
24 22
USA
OECD
Japan
20 18 16 14 12 10 8 6 4 2 0 -2 1965
1970
1975
1980
1985
1990
1995
2000
Inflation
Aggregate demand, aggregate supply and the price level
Aggregate demand and aggregate supply
Price level
AS
Pe
AD O National output
Aggregate demand and aggregate supply
Price level
AS
Pe P2
b
a AD
O National output
Inflation
Demand-pull and cost-push inflation (a) demand-pull inflation
Demand-pull inflation
Price level
AS
P1
AD1 O
Q1 National output
Demand-pull inflation
Price level
AS
P1
AD2 AD1 O
Q1 National output
Demand-pull inflation
Price level
AS
P2 P1
AD2 AD1 O
Q1
Q2
National output
Inflation
Demand-pull and cost-push inflation (b) cost-push inflation
Cost-push inflation
Price level
AS1
P1
AD O
Q1 National output
Cost-push inflation AS1
Price level
AS2
P1
AD O
Q1 National output
Cost-push inflation
Price level
AS2
AS1
P2 P1
AD O
Q2
Q1 National output
Inflation
The interaction of demand-pull and cost-push inflation
The interaction of demand-pull and cost-push inflation
Price level
AS1
P1
AD1 O National output
The interaction of demand-pull and cost-push inflation
Price level
AS2
AS1
P2 P1
AD2 AD1 O National output
The interaction of demand-pull and cost-push inflation AS3 AS
Price level
2
AS1
P3
P2
AD3
P1
AD2 AD1 O National output
Inflation
The interaction of demand-pull and cost-push inflation (a) an initial increase in aggregate demand
Initial demand-pull inflation Subsequent supply response
Price level
AS1
P3
d
P2 P1 P0
AS
c b a AD2 AD
O National output
AD1
Initial demand-pull inflation Subsequent demand response
Price level
AS1 P4 P3
e d
P2 P1 P0
AS
c b a AD3 AD2 AD
O National output
AD1
Initial demand-pull inflation AS2 AS1 f
Price level
P5 P4 P3
e Subsequent supply response
d
P2 P1 P0
AS
c b a
AD3 AD2 AD
O National output
AD1
Initial demand-pull inflation
Price level
AS2 g
P6 P5
f
P4 P3
d
e
P2 P1 P0
AS1
AS Subsequent demand response
c b a AD3 AD2 AD
O National output
AD1
AD4
Inflation
The interaction of demand-pull and cost-push inflation (b) an initial reduction in aggregate supply / increase in aggregate costs
Initial cost-push inflation
Price level
AS2 AS1
P3 P2 P1 P0
AS
d c b a
Subsequent demand response
AD O National output
AD1
Initial cost-push inflation AS3
Price level
AS2 AS1
P4 P3 P2 P1 P0
e
AS
Subsequent supply response
d c b a
AD O National output
AD1
