Wages push inflation:If the increase in wages, under labor unions pressure, is high than their labor productivity, the cost of production goes up. The businessmen raise the price of products which gives a spurt to prices.
Profits push inflation:If the producers of certain commodities have monopoly or near monopoly power in the market, they fix up higher profit margins arbitrarily without any increase in other elements of cost. When a few powerful firms increase the profit margins, the higher profit margins, thus inflate the price level.
Material push inflation:
If there is increase in the prices of some basic materials such as gas, steel, chemicals. Oils etc which are used directly or indirectly in almost all industries, it causes an increase in cost of production and hence in the general price level.
Higher taxes:
If the government levies new taxes and raises the rates of old taxes, the producers generally shift the burden of taxes on to the consumers. The increase in the selling price of the commodities pushes up the inflationary trend in the economy.The cost push inflation can be contained only by appropriate wage and income policies and imposition of some degree of the direct controls.
Profits push inflation:If the producers of certain commodities have monopoly or near monopoly power in the market, they fix up higher profit margins arbitrarily without any increase in other elements of cost. When a few powerful firms increase the profit margins, the higher profit margins, thus inflate the price level.
Material push inflation:
If there is increase in the prices of some basic materials such as gas, steel, chemicals. Oils etc which are used directly or indirectly in almost all industries, it causes an increase in cost of production and hence in the general price level.
Higher taxes:
If the government levies new taxes and raises the rates of old taxes, the producers generally shift the burden of taxes on to the consumers. The increase in the selling price of the commodities pushes up the inflationary trend in the economy.The cost push inflation can be contained only by appropriate wage and income policies and imposition of some degree of the direct controls.
