demand-pull inflation investment & finance definition
An inflationary condition that occurs when demand
outpaces supply. People are competing for a too-small amount of goods, which
drives prices up. In order to monitor demand-pull inflation, traders and
investors watch the producer and consumer price index statistics produced by
the U.S. government. Demand-pull inflation is the opposite of cost-push
inflation, where increasing costs drive inflation up.
See demand-pull inflation in Wall Street Words
Rising consumer prices resulting from the demand for goods and services exceeding supply. Demand-pull inflation is likely to enhance corporate profits because businesses are able to increase the prices they charge without corresponding increases in their costs. Compare
cost-push inflation.
Learn more about demand-pull inflation