Cost-push inflation (成本推动型通货膨胀 chéng běn tuī dòng xíng tōng huò péng zhàng) refers to an increase in overall price level known as inflation due to an increase in the cost of factors of production. Higher costs lead to a decrease in aggregate supply and drive prices up. See: Demand-push inflation (需求拉动型通货膨胀 xū qiú lā dòng xíng tōng huò péng zhàng).
Part 1: Breakdown of Words
- “Cost” (成本 chéng běn) as in “opportunity cost” (机会成本 jī huì chéng běn).
- “Push” (推动 tuī dòng) as in “driving force” (推动力 tuī dòng lì).
- Inflation (通货膨胀 tōng huò péng zhàng) as in “rate of inflation” (通货膨胀率 tōng huò péng zhàng lǜ), “hyperinflation” (恶性通货膨胀 è xìng tōng huò péng zhàng).
- “通” (tōng) as in “traffic” (交通 jiāo tōng), “by/through/via” (通过 tōng guò), or “usually” (通常 tōng cháng).
- “货” (huò) as in “currency/money” (货币 huò bì), “goods” (货物 huò wù), or “freight transport” (货运 huò yùn).
- “膨” (péng) as in “(of rice, corn, etc.) be poped” (膨化 péng huà), or “puffy” (膨松 péng sōng).
- “胀” (zhàng) as in “swelling” (肿胀 zhǒng zhàng), or “stagflation” (滞涨 zhì zhàng).