This research supports the theory of the demand-pull inflation
. Also, world financial market indicated by exchange rate movement has a significant impact on domestic inflation in Indonesia.
Life Cycle Hypothesis suggested that people in middle working age (40 to 64 years) are net savers while retirees and the youth are relatively more dis-savers, thus, rise in proportion of middle age working population leads toward decrease in demand-pull inflation
(1975) Cost-push versus Demand-pull Inflation
: Some Empirical Evidence, Journal of money, credit & banking (Ohio State University Press), 7(3), 391.
The energy price inflation therefore through cost push inflation and demand-pull inflation
has a major impact on core inflation itself, thereby playing a significant role in macroeconomic health of a country.
will rise, but stay at manageable, low single-digit levels.
Net Foreign Grants (NFG) and Interest Rate (IR) for demand-pull inflation
. Empirical results suggest that Pakistan is experiencing demand-pull inflation
(rather than cost-push) which points to interest rate money supply net foreign aid and grants (except money supply) as significant causal factors explaining approximately 43.74% of the inflation in Pakistan.
In the language of the time, demand-pull inflation
would not be a problem.
Second, even when (if) the expanded money supply does leak onto the high street, there is still a lot of slack to be absorbed before demand-pull inflation
becomes a big threat.
Governments can use indirect monetary instruments and macro-prudential measures to manage liquidity, however S&P views these instruments as insufficient particularly when an economy is faced with imported, demand-pull inflation
, as well as supply-push inflation as was the case in the GCC during 2007-2008.
The demand-pull inflation
emerged from 2004 and it continued till 2008.
Domenico Fanizza, the head of the IMF mission in Kenya, says "Kenya needs to reduce the pace of the growth of private sector credit that is fuelling the rise in demand-pull inflation
." In September alone, private sector credit grew by 36% compared to the same month in 2010, a rate that was unsustainable.
Of the two, the demand-pull inflation
that has resulted from historically unprecedented growth in China and India is the more significant cause of fiscal and monetary policy decision difficulties in the U.S.
''Given only limited risks of demand-pull inflation
, (the BOJ) is expected to stick to a wait-and-see stance by around summer next year.''
The bank said, "The downward trend of inflation stemmed from the slumped domestic demand which helped reduce pressure from the demand-pull inflation
while the continued appreciation of the baht helped mitigate the cost-push inflation from potentially rising oil prices."
This will boost demand-pull inflation
. Current trends suggest that Japan's jobless rate could fall below 4 percent by early 2006, so that inflation is expected to pick up after mid-2006.