The Business Times
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BT Explains: What is cost-push inflation and how can governments address it?

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Tessa Oh

Tessa Oh

Published Tue, Jun 21, 2022 · 03:54 PM
    • Today’s rising prices are mostly a result of cost-push inflation: Covid-19 resulted in unprecedented supply chain disruptions, and these bottlenecks have jacked up prices globally.
    • Today’s rising prices are mostly a result of cost-push inflation: Covid-19 resulted in unprecedented supply chain disruptions, and these bottlenecks have jacked up prices globally. PHOTO: REUTERS

    THE US Federal Reserve’s 75-basis-point hike last week – the largest interest rate increase since 1994 – aimed to curb soaring inflation, which has hit decade-highs in the US and the European Union.

    Yet such hikes chiefly target demand-side inflationary pressures, while today’s rising prices are fuelled by supply-side constraints.

    The Business Times (BT) looks at the difference between demand-pull and cost-push inflation and the tools policymakers can use to contain it.

    Singapore economyUS Federal ReserveSingapore inflationInflationMonetary Authority of SingaporeMonetary PolicyBT Explains

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