inflatsioonisurve

Inflatsioonisurve refers to the underlying upward pressure on prices within an economy. It represents forces that tend to push inflation higher than the central bank's target or desired level. This pressure can stem from various sources, both on the demand and supply sides of the economy.

Demand-side inflatsioonisurve can arise when aggregate demand outstrips the economy's ability to produce goods and services. This "too much money chasing too few goods" scenario can happen due to strong consumer spending, increased government investment, or a rapid expansion of credit. When businesses face consistently high demand, they have more power to raise prices.

Supply-side inflatsioonisurve, on the other hand, occurs when the cost of producing goods and services increases. This can be driven by rising raw material costs, such as oil or metals, or by higher labor wages that exceed productivity gains. Disruptions to supply chains, such as those caused by natural disasters or geopolitical events, can also create temporary or persistent upward pressure on prices by limiting the availability of goods.

Central banks closely monitor inflatsioonisurve as it can erode purchasing power and destabilize the economy. They employ monetary policy tools, such as adjusting interest rates, to manage these pressures. By making borrowing more expensive, central banks aim to cool down demand and thus reduce inflatsioonisurve. Conversely, if inflatsioonisurve is too low, they might lower interest rates to stimulate economic activity. Understanding the sources and dynamics of inflatsioonisurve is crucial for effective economic management.