Causes of the crisis: inflation

The recent resurgence of inflation can be attributed primarily to cost-push and profit-push factors, even though it is sometimes attributed to a combination of cost-push and demand-pull factors. Nine possible causes of the resurgence of inflation are identified and discussed. These include the semiconductor chip crisis, the energy crisis, the food crisis, the global supply chain crisis, wage-push inflation, profit-push inflation, productivity growth slowdown, inflationary expectations and globalisation. Out of these factors, two are questionable: wage-push and inflationary expectations. Resurgent inflation has been caused mostly by cost-push and profit-push factors, particularly the rise in food and energy prices. The situation was aggravated by “feedback loop pressures” because food production is highly energy-intensive.