(2) Deep reasons.
① Demand pull
That is, the excessive increase of total demand in economic operation exceeds the supply of goods and services at the established price level, which leads to inflation.
Demand-driven inflation refers to inflation caused by excessive growth of total demand, that is, "too much money chasing too few goods". According to Keynes's explanation, if the total demand rises to a level greater than the total supply, excessive demand will cause a general rise in the price level.
In China, fiscal deficit, credit expansion, investment demand expansion and consumer demand expansion often lead to the emergence of demand-driven inflation in China. China's inflation from 1979 to 1980 is caused by the demand-driven fiscal deficit.
Therefore, any factor that increases aggregate demand may be the specific cause of demand-driven inflation.
② Cost increase
Inflation caused by cost or supply, that is, cost-driven inflation, also known as supply-oriented inflation, is an increase in the general price level caused by the increase in production costs of manufacturers. The reasons for the upward movement of costs are as follows: wages are rising too fast; Profit growth is too fast; The price of imported goods has gone up.
(1) Wage-driven inflation
Wage-driven inflation is the cost increase caused by excessive wage increase, which pushes up the overall price level. Wage is the main part of production cost. The increase of wages makes the production cost increase, and at a given price level, the quantity that manufacturers are willing and able to supply decreases, thus making the total supply curve move to the upper left.
In a completely competitive labor market, the wage rate is completely determined by the balance of supply and demand of labor, but in the real economy, the labor market is often incomplete, and the existence of strong trade union organizations often leads to excessive wage growth.
If the increase of wages exceeds the increase of labor productivity, then the increase of wages will lead to the increase of costs, which will lead to the rise of the overall price level. Moreover, once this inflation starts, it will also lead to a "wage-price spiral", which will push wages and prices together and form serious inflation.
The increase in wages often starts from individual parts and eventually leads to the comparison of other parts.
(2) Profit-driven inflation
Profit-driven inflation refers to the increase in the general price level caused by manufacturers seeking greater profits. Like wage-driven inflation, monopoly and oligopoly manufacturers with market power can also obtain higher profits by raising product prices.
Compared with the perfectly competitive market, the manufacturers in the imperfect competitive market can reduce the production quantity and raise the price, so as to obtain more profits. Therefore, manufacturers try to become monopolists. As a result, the overall price level has risen.
(3) Inflation driven by import costs
Another important reason for cost-driven inflation is the rising price of imported goods. If a country relies mainly on imports for raw materials needed for production, the rising prices of imported goods will cause cost-driven inflation, and its formation process is the same as wage-driven inflation.
③ structural disorder
That is, inflation is caused by the imbalance of national economic structure such as departmental structure and industrial structure of a country. Due to the serious imbalance of China's economic structure, structural imbalance inflation also occurs from time to time in China.
④ insufficient supply
That is, in the case of constant total social demand, the relative shortage of total social supply causes inflation. The hidden inflation in China during the Cultural Revolution was largely caused by the serious destruction of social productive forces and the serious shortage of commodity supply. ?
⑤ Improper expectations
That is, in the case of persistent inflation, people's improper expectations of inflation (too pessimistic about the future inflation trend) cause more serious inflation.
⑥ Institutional factors
Inflation caused by imperfect system. These are the main causes of inflation. It should be noted that for a specific inflation, the reasons are often not single, but a combination of many reasons, so a comprehensive analysis is needed.
Extended data:
According to the severity of inflation
1, low inflation
Low inflation is characterized by slow and predictable price increases. It can be defined as inflation with an annual inflation rate of 1 digit. At this time, prices are relatively stable, and people trust money.
2. Rapid inflation
This kind of inflation will occur when the price level rises at the rate of 20%, 100% or even 200% every year. Once this inflation situation is formed and stabilized, there will be serious economic distortions.
3. hyperinflation
The most vicious Hyperinflation, money has almost no fixed value, and the price has been increasing. Its disastrous influence makes the market economy useless.
4. Classification according to the causes of inflation.
Demand-driven inflation (an inflation characterized by spontaneity, inducement and support) is due to the rapid growth of total social demand, which exceeds the growth rate of total social supply, resulting in insufficient supply of goods and services and rising prices.
5. Cost-driven inflation
Cost-driven inflation, also known as cost inflation or supply inflation, refers to the sustained and significant increase in the general price level caused by the increase in supply costs without excessive demand.
6. Imported inflation
Imported inflation refers to the continuous increase in domestic prices (caused by exchange rate) due to the increase in the prices of foreign commodities or production factors.
7. Structural inflation
Structural inflation refers to the phenomenon that the price rises when the total demand is not too much, and the excessive demand for products by some departments leads to the price rise of some products.
Baidu encyclopedia-inflation