The conditions cost-push inflation and demand-pull inflation are associated with Keynesian Business economics. Without going into beginners on Keynesian Business economics (a good one can be found at Econlib) we can still comprehend the difference between two conditions.
Inflation is due to a combination of four aspects. Those aspects are:
• The supply of cash goes up.
• The supply of products goes down.
• Demand for cash goes down.
• Demand for products goes up.
The description of cost-push and demand-pull inflation and see if we can comprehend them uses our four aspects.
Definition of Cost-Push Inflation
Explanation for cost-push inflation:
"Inflation can result from a loss of total supply. The two primary resources of loss of total supply are:
A development of salary rates
A development of the costs of raw components
These resources of a loss of total supply operate by increasing costs, and the producing inflation is known as cost-push inflation
Other things remaining the same, the higher the price of development, the smaller is the amount created. At a given price range, growing salary prices or growing costs of raw components such as oil lead firms to reduce the quantity of employed and to cut development."
Aggregate supply is the "the total value of the products or services created in a country" or basically aspect 2, "The supply of goods". The supply of products can be affected by aspects other than an improvement in the price of information (say a natural disaster), so not all aspect 2 blowing up is cost-push blowing up.
Of course, the next question would be "What triggered the price of information to rise?” Any blends of the four aspects could cause that, but the two most likely are aspect 2 (Raw components such as oil have become more scarce), or aspect 4 (The need for raw components and work have risen).
Explanation for demand-pull inflation:
"The blowing up as a result of an improvement in total need is known as demand-pull blowing up. Such an blowing up may occur from any individual aspect that improves total need, but the primary ones that generate ongoing improves in total need are
• Increases in the cash supply
• Increases in govt purchases
• Increases in the price range on the globe
Inflation due to an improvement in total need is inflation due to aspect 4 (An improvement in the need for goods).
The three most likely causes of an improvement in total need will also tend to improve inflation:
Increases in the cash supply this is basically aspect 1 inflation.
Increases in government buys the increased need for products by the government causes aspect 4 inflation.
Increases in the price range on the globe Assume you are living in the United States. If the price of gum increases in North America, we should expect to see less People in America buy gum from Canadians and more Canadians purchase the cheaper gum from Usa resources. From the Usa perspective the need for gum has increased causing a price development of gum; a aspect 4 inflation.