Y1/IB 11) Causes of Inflation (Demand Pull and Cost Push)

[@EconplusDal]

April, I am using two different models of Aggregate Supply here - the classical model (SRAS) for cost push inflation and Keynesian model (very useful for evaluation) for demand pull inflation

[@evotas1]

Firstly, i'd like to say thank you so much for making this series. It's really helping me out! Second of all, I'd just like to add, for the Cost Plus you can use a depreciation of exchange rates as well, to a factor that increases the price of production, (like importing oil for instance, will become more expensive, due to your own exchange rate depreciating)

[@theresa-2154]

Thank you so much. I am writing Tuesday my first economic exam in my life, because I picked it as a side subject to my normal degree. Thought I would be doomed, but you explained things so well in every video that you probably saved me from failing. Thank you a lot. Greetings form Germany

[@rpasheva]

Thank you, great explanation, could use a little more light

[@DanielRamBeats]

Really great examples, thanks for taking the time to record!

[@nethmeedantanarayana4811]

I love your videos!!!! They are so clear and easy to understand!!!! Thanka a ton!!! 😊💕

[@Boom1990man]

Thank you very much. Excellent explanation!

[@mohidakram5337]

Thankyou you so much. I struggled with this. you have provided so much clarification.

[@sebastianotomasso1843]

Thank you, I find every lesson very useful

[@mrtxx8905]

thank you, i find you fucking beautiful

[@Themessageislam1234]

legendary thank you

[@mahmisheikh3354]

i wish you could write those explanations sir Thanks its helping anyway

[@aakashsotta_cupji]

thank you so much for explaining theses concepts. your explanation is very simple and exemplary.

[@williamhewetson767]

such a good teacher

[@anacristinacanalesgomez4831]

thank you so much, it´s very clear. Could you explain which is the mechanism by which budget deficit creates inflation?

[@electronicmusic2562]

Thank you so much for the videos. Really appreciate your work!

[@anushikafernando4936]

Thank you so much! Your amazing at teaching :)

[@umeimaabdulhussein2078]

thank you very good explanation!

[@ohmyonedirection]

why is the AS curve a straight line in Cost Push whereas in Demand Pull it was the standard curved shape?

[@TheCbstar]

April Gough the AS curve in Cost Push is a classical diagram. Whereas in Demand-pull is a Keynesian curve

[@bidurbhattarai4745]

Excellent video!. For cost push inflation, could you also talk about increase in indirect tax and reduction in subsidies ?

[@EconplusDal]

Yes most definitely, as long as your analysis refers to all firms in the economy (i.e. you keep it in a macro context)

[@wiktorzalewski223]

Love this video, helped so much, explained so well. TYVM :)

[@randomcomment5875]

I don’t understand what inflationary deflationary pressure is? I get demand pull and cost push but not inflationary deflationary pressure.

[@irwingoh94]

Is inflation expectation and structural inflation consider the cassuse of inflation??

[@priyeshramesh1203]

Great Video!. So are the firms increasing the price from PL1-PL2 because of the pressure put on the existing factors of production (as workers may for instance ask for increase in wages, to cope with the extra hours, or because land becomes more scarce)

[@EconplusDal]

Thanks. Yes, for demand pull inflation, you're right for both reasons - scarcer factors of production puts upward pressure on prices. For cost push inflation the increases in costs of production feed through into higher prices hence inflation

[@tanveededhia2866]

I thank to the Econplusdal and the tutor for amazing explaining all the economic concepts which has helped me in clearing one of the most difficult subjects of actuarial science....😊

[@mrbobm00]

One question: since it is inflation we are talking, in the Keynes diagram on the left shouldnt demand curves be cutting supply curves in the YFE point,the inflation part of the prices?

[@pablojp3498]

"inflation part" is from Y1 to Yfe, what you're referring is the neoclassical zone. And no, inflation can occur at any point beyond Y1

[@supertrainmaniac]

Hi, what does the YFE represent on the demand pull inflation graph?

[@Jigr4m]

the full potential of the economy with current scarce resources

[@dummeytitan8130]

What about growth of money supply?

[@MahinAhmed]

Thank you sir!

[@priyeshramesh1203]

Thank you for replying. Sorry to bother you again, I have another question. When the aggregate demand curve for instance shifts to the right, does that mean that the quantity demanded of national output in the economy increase at each price level?

[@EconplusDal]

Yes

[@charlottesiu678]

thank you,really useful!

[@ilyaswarshow6755]

is it fine to explain the cost push inflation in the same way it is in microeconomics so a decrease in supply leads to excess demand at the initial equilibrium which causes the price to increase?

[@EconplusDal]

Yes absolutely - there is now greater competition for scarce resources increasing the price level

[@jakazen]

Ace was not done on the second diagram

[@vid_sh_itsme4340]

very good

[@mizanuddin7879]

whats Yfe on the demand pull graph

[@hachiko2989]

full employment

[@mizanuddin7879]

@@hachiko2989 lol thanks but exams are cancelled

[@tonu529]

How does the increase in the price of oil lead to an increase in cost of production?

[@ADHISHpoudel]

oil (fossil fuels, natural gas) is used in all of the production processes so a rise in oil prices will increase the cost of production

[@savigera844]

Sir inflation is an macro economic concept so why we are not doing it .with AD and AS curve....?...please clear my doubt...

[@sabinaxox8269]

He is using AD and AS, its the same thing as SRAS and LRAS it doesn't matter what you use

[@savigera844]

@@sabinaxox8269 thank you

[@alexandra-ij1ce]

bestie xx

[@satadalchakravarty3911]

thanks man.

[@croodybroody]

could i use the equation for AD in the definition for AD in an essay?

[@jadengunawardena3824]

yes u may get marks as a knowledge point if u do edexcel

[@mattcj1367]

please cans somebody help me link STAGFLATION with COST PUSH INFLATION

[@ilyaswarshow6755]

okay, thanks

[@kazanova17]

you didn't label your AD curve in the cost push inflation diagram :)

[@jamessookias7119]

y didnt u label AD sir

[@jadengunawardena3824]

im pretty sure he just forgot

[@kenysundanum8217]

KaV ban camm