ch29 10电子讲座通货膨胀失业商业周期.pdf

Inflation Cycles In the long run, inflation occurs if the ty of money grows faster than potential GDP. In the short run, many factors can start an inflation, and real GDP and the price level in ct. To study these in ctions, we distinguish two sources of inflation: ▪ Demand-pull inflation ▪ Cost-push inflation Inflation Cycles Demand-Pull Inflation An inflation that starts because aggregate demand reases is called demand-pull inflation. Demand-pull inflation can begin with any factor that reases aggregate demand. Examples are a cut in the interest rate, an rease in the ty of money, an rease in ernment expenditure, a tax cut, an rease in exports, or an rease in investment stimulated by an rease in expected future profits. Inflation Cycles Initial Effect of an rease in Aggregate Demand Figure 29.1(a) illustrates the start of a demand-pull inflation. Starting from full employment, an rease in aggregate demand shifts the AD curve rightward. Inflation Cycles The price level rises, real GDP reases, and an inflationary gap arises. The rising price level is the first step in the demand-pull inflation. Inflation Cycles Money Wage Rate Response The money wage rate rises and the SAS curve shifts leftward. The price level rises and real GDP decreases back to potential GDP. Inflation Cycles A Demand-Pull Inflation Process Figure 29.2 illustrates a demand-pull inflation spiral. Aggregate demand keeps reasing and the process just described repeats indefini y. Inflation Cycles Although any of several factors can rease aggregate demand to start a de