Költségpush

Költségpush is a term used in Hungarian economic discourse to describe a process in which increases in production or input costs lead to higher consumer prices, contributing to inflation even when overall demand remains stable or weak. It is commonly associated with the broader concept of cost-push inflation, but the term is used more informally and often as a neologism in media and academic writing.

Etymology and usage: The word költségpush combines the Hungarian word költség (cost) with the English word push, conveying the idea that higher costs push prices upward. It is not a formal economic category and its usage varies across sources; some writers treat it as equivalent to cost-push inflation, while others use it to highlight the immediate price transmission mechanism in supply chains.

Mechanism: Cost pressures can arise from rising wages, higher energy or raw material prices, supply disruptions, regulatory burdens, or depreciation of the exchange rate. When producers face higher unit costs, they may reduce margins or increase prices. If these cost increases become persistent and inflation expectations adjust upward, the resulting price level may rise even in the absence of a strong demand shock. In some cases, cost-push dynamics interact with price-setting behavior and wage negotiations, potentially creating a broader inflationary environment.

Context and policy responses: Cost-push episodes are often temporary but can be persistent if underlying cost drivers endure. Policy responses typically focus on monetary tightening to prevent inflation from becoming entrenched, along with supply-side measures such as energy efficiency, productivity improvements, and diversification of inputs to reduce structural cost pressures.

Relation to other concepts: Költségpush is closely related to cost-push inflation and is contrasted with demand-pull inflation, where rising demand drives prices up. Analysts note that modern inflation may involve a mix of supply and demand factors, with cost pressures acting as one channel among several.

See also: Cost-push inflation, wage-price spiral, supply chain, inflation expectations.