Inflation  

Pimpy Haoyu Katchan Eddy 

Inflation 
Definition 

Inflation is the increase in the general level of prices for 

goods and services in an economic system of a country over a 
period of time. 

Terms Related to Inflation 

Deflation​ - (has the opposite effect of inflation.) A period of 

decreasing or declining general level of prices for goods and 
services in a country’s economy 

 
Disinflation​ - Over time in economy, the general price of goods 
and services has a temperate slow down of the inflation rate 
growth.  

Stagflation​ - An economic condition where economic growth is 

very slow and prices are rising and people get a higher chance 
of unemployment because of this condition.  

Hyperinflation​ - A hyperinflation is when the prices are too 

high without being supported by growth in GDP (Gross domestic 
product)(The value of all the product a country produce in one 
year). 

Headline​ ​Inflation​ - Inflation figure which is not adjusted or 

changed for seasonality or the food and and energy price caused 
by demand pull. 

Reflections 
Please reflect on how you have observed inflation in your life 
and how inflation has impacted your life. There should be 4 
paragraphs here with 4 different reflections. You can do them 
like this: 

Eddy - When I try to buy a flight ticket during winter break to 
go back to Korea, the price of the ticket has much more 
increased compared to other seasons. This is because, many 

 
people come to Chiang Mai during winter since the weather in 
winter is cooler compared to other seasons, therefore it isn’t 
hot that much and it is cold that much as Korea does. Therefore, 
people come to enjoy touring and golf the most during this 
season, and this leads to the inflation of flight ticket during 
winter. This didn’t impact my life a lot, however, I have paid 
much more money for my flight ticket and I have noticed that I 
have to buy a flight ticket earlier before winter comes.  

Pimpy - Last year when I was trying to buy a concert ticket to 
go meet my idol in Bangkok. When the booking time comes I was 
too excited, I open up the website but I forgot to change the 
time to the Korea time zone. But I keep trying and be as fast as 
I can. But I was too late and all the ticket was sold out. I 
heard that there will be a resale ticket because there were so 
many people who wanted to attend the concert because it was 
their first concert in Thailand. So I wait for the resale ticket 
but this time the ticket price went up because so many people 
were fighting for this ticket. But no matter how much it cost I 
wanted to see my idol so I decided to pay double amount of the 
original price too but 1 ticket.  

 
Haoyu - I never really observed inflation in my life. I think 
all it effect is how much money do we need to spend on different 
things. 

Katsuya -  

CPI (Consumer Price Index) 

Definition 
CPI is a word for the average of how much (how many 
percent) money do all the consumer spend on different kind of 
goods or service. It shows how much (how many percent) money do 
all the consumer spend for different thing in daily life. “The 
CPI is one of the most frequently used statistics for 
identifying periods of inflation or deflation.”

Causes of CPI Change 

CPI gets affected by inflation and deflation. Strong 
inflation makes people to have more money to spend, therefore 
the CPI goes up. The high and low of CPI shows how strong is the 
inflation. Government can have a clear idea what should they do 
to fix inflation (or deflation).  

 
 CPI direct affect Stock market and Financial market: When 
CPI goes up, citizens have more money, they spend more and the 
companies get more money and the stock of those companies goes 
up. 

Real-life​ ​Example 
Calculated by – Central Statistical Organization (CSO) in 
Ministry of Statistics and Programme Implementation (MoSPI) 
using Laspeyres formula (basically our weighted average 
formula) 

In this data we can see 2012 in India. It shows the average 

of the percentage of how many money do Consumers spend on food & 
beverages is 45.86%. There are two possibilities shown from this 
data: 

1. Demand is high and supply is low. People need to spend 

more money than before on food.  

2. People don’t have money to buy other things.  

Demand pull - Eddy 

Definition 

Demand pull is an inflation caused when total demand which is a 

consumer's desire and ability to purchase​ a good or service is 
more than the amount of supply. 

 
  

Causes 

● Growing Economy 
○ When consumers feel confident, they will spend more 
money, take on more debt by borrowing more which leads 
to a steady income in demand, which means higher 
prices. 
● Expectation of Inflation 
○ Once people expect inflation, they will buy things now 
to avoid higher future prices. That increases demand, 
which then creates demand-pull inflation. 
● Over-expansion of the Money Supply 
○ This happens when there is too much money chasing too 
few goods and this occurs when the government prints 
too much money to pay off its debt.   
● Strong Brand 
○ This is a cause which is created by marketing. 
Marketing can create high demand for certain products, 
a form of ​asset inflation​. 
● Technological Innovation 

 
 ○ A company that creates a new technology owns the 
market until other companies figure out how to copy 
it. People will demand products with technologies that 
create a real improvement in their daily lives. The 
new technology also creates a cachet for those who 
must own the latest gadget.  

Real-life Example 

When oil refineries (an industrial process plant where oil is 
transformed and refined into more useful products, such as 
gasoline, diesel fuel) work at full capacity, they cause 
demand-pull inflation. Environmental concerns cause regulatory 
problems for refineries. Because of prohibitive factors by the 
government due to environmental concerns, supply created by oil 
refineries is also limited. Rather than a lack of oil or the 
lack of companies to produce oil, this prevents the market from 
providing the best product efficiency in producing goods with 
high demand. The oil industry, then, is one of the biggest 
contributors of demand-supply inflation. 

Cost Push  

Definition 

Cost push inflation is an inflation caused by an increase in 

prices of inputs like labour, raw material, etc which leads to a 
decreased supply of goods.  

Video about Cost Push 

 
  

Causes 
● Monopoly  
○ Companies that achieve a monopoly over an industry 
create cost-push inflation. A monopoly reduces supply 
to meet its profit goal. 
● Wage inflation 
○ Wage inflation occurs when workers have enough 
leverage to force through wage increases. Companies 
then pass higher costs through to consumers. 
● Natural disaster 
○ Natural disasters cause inflation by disrupting 
supply. 
● Government Regulation and Taxation  
○ Government regulation and taxation. These rules can 
reduce supplies of many other products. Taxes on 
cigarettes and alcohol were meant to lower demand for 
these unhealthy products.  
● Exchange Rates 
○ A shift in exchange rates. Any country that allows the 
value of its currency to fall will experience higher 
import prices.  

Real-life examples 

 
1. In early 1970s, the Organization of Petroleum Exporting 
Countries (OPEC) took steps to decrease global oil supply. 
During the period there was no extraordinary increase in the 
volume of consumption, but the prices still surged, therefore 
the increase in general level of prices due to increase in oil, 
which is an important input in every production process. 

2. In 2012, severe floods hit the Punjab and Sind provinces of 
Pakistan wiping away crops, shutting down refineries, killing 
cattle and creating widespread disruption in supplies. 
Therefore, there was an increase in general level of prices 
ensued due to drop in aggregate supply. 

Quantity Theory (of Money) 

Definition 

According to ​this website​, its says “ The quantity theory of 

money states that there is a direct relationship between the 
quantity of money in an economy and the level of prices of goods 
and services sold. ​According to QTM, if the amount of money in 
an economy doubles, price levels also double, causing 
inflation”. 

 
  

Final Reflections 

Haoyu - I learned a lot of Inflation, at least the part I need 

to research on which is Stagflation and Consumer Price Index 
(CPI). I have a clear idea of what are those, what are they use 
for, the effect by them and what caused them. My idea changed a 
lot, before I have no idea what is Inflation. I don’t care about 
it.  

Eddy - At first, I already knew what is inflation, however I 

didn’t knew in depth about inflation such as the causes and 
effects of inflation. I have also thought that inflation is only 
a negative phenomenon happening in our society, however after 
learning about inflation I have learned that inflation can also 
benefit us in some way such as economic growth and my idea has 
changed a little about inflation. After doing this research 
project about Demand Pull, I was able to know about Cost Pull in 
depth. I now clearly know and understand the definition, causes, 
and some real-life examples about demand pull and how does it 
work in a economic system. Also, by reading other’s research 

 
about the causes of inflation, I was able to know basic 
informations for other causes of inflation as well including 
CPI, cost push, and quantity theory.  

Pimpy - I’ve never known and understand what inflation before. 

But after doing this assignment I get a better understanding of 
it and I’ve learned what is a cost-push is the most because it’s 
my part to do research on. I’ve had a better understand and 
learn many pieces of information on demand pull, CPI and 
quantity theory by reading my friend research. 

Katchan - I've learned what is inflation but my job was to 

research quantity theory, 

SOURCES 
 

Amadeo, K. (n.d.). 5 Causes of Demand-Pull Inflation. Retrieved from 

https://www.thebalance.com/what-is-demand-pull-inflation-3306100 

Amadeo, K. (n.d.). The 5 Causes of Cost-push Inflation. Retrieved from 

https://www.thebalance.com/what-is-cost-push-inflation-3306096  

Civilsdaily. (N.D.). Economics | Inflation explained with real life examples. 

Civilsdaily. Retrieved from: 

https://www.civilsdaily.com/economics-inflation-explained-with-real-life-

examples/  

Cost-Push Inflation. (n.d.). Retrieved from 

https://xplaind.com/644593/cost-push-inflation 

Definition of Cost Push Inflation | What is Cost Push Inflation ? Cost Push 

Inflation Meaning. (n.d.). Retrieved from 

https://economictimes.indiatimes.com/definition/cost-push-inflation  

Heakal, R. (2018, May 27). What is the Quantity Theory of Money? Retrieved 

from 

 
 https://www.investopedia.com/insights/what-is-the-quantity-theory-of-money/#

ixzz5QOrjkkvV  

Inflation and Related Terms: Explained. (n.d.). Retrieved from 

https://www.equiti.com/newsroom/articles/inflation-related-terms/ 

Inflation: Cumulatively Rising And Creeping/ Leaping Upwards (Result: Weaker 

Dollar). CASHBACK FOREX. Retrieved from: 

https://www.cashbackforex.com/en-us/school/tabid/426/ID/435600/inflation-

cumulatively-creeping-leaping-upwards  

Reem Heakal​.(May 26, 2018).What is the Quantity Theory of Money? Investopedia, 

Retrived from : 

https://owl.purdue.edu/owl/research_and_citation/apa_style/apa_formatting 

_and_style_guide/reference_list_electronic_sources.html  

What is Inflation, Deflation, Stagflation, Hyperinflation. (n.d.). Retrieved 

from http://www.allbankingsolutions.com/banking-tutor/inflation.htm 

Wilson Kevin. (14th January 2017). Stagflation And Recession Risk In 2017. 

Seeking Alpha. Retrieved from: 

https://seekingalpha.com/article/4036846-stagflation-recession-risk-2017 

Staff, I. (2018, April 20). Cost-Push Inflation. Retrieved from 

https://www.investopedia.com/terms/c/costpushinflation.asp 

What is Inflation, Deflation, Stagflation, Hyperinflation. (n.d.). Retrieved 

from http://www.allbankingsolutions.com/banking-tutor/inflation.htm  

Staff, I. (2018, April 20). Demand-Pull Inflation. Retrieved from 

https://www.investopedia.com/terms/d/demandpullinflation.asp 

Hayes Adam. (23rd/March/2017). All About Inflation. Investopedia. Retrieved 

from: https://www.investopedia.com/university/inflation/  

Investopedia. (N.D.). Stagflation. Investopedia. Retrieved from: 

https://www.investopedia.com/terms/s/stagflation.asp  

 
Investopedia. (N.D.). Consumer Price Index (CPI). Investopedia. Retrieved 

from: https://www.investopedia.com/terms/c/consumerpriceindex.asp  

胡健. (11th/September/2015). CPI与PPI. 现20年最大“剪刀差”稳增长需加码.中国经济网.

Retrieved from: 

http://finance.ce.cn/rolling/201509/11/t20150911_6453687.shtml  

 
Criterion c: 
Level 1-2 Level 3-4 Level 5-6 Level 7-8

i. Communicates i. Communicates i. Communicates i. Communicates

information and information and information and information and
ideas in a ideas ideas ideas
limited way​, satisfactorily accurately​ by effectively​ and
using a style by using a style using a style accurately​ by
that is ​limited that is that is ​mostly using a style
in its somewhat appropriate to that is
appropriatenes appropriate to the audience completely
s to the the audience and purpose. appropriate to
audience and and purpose. ii. Structures the audience
purpose. ii. Structures information and and purpose.
ii. Structures information and ideas in a way ii. Structures
information and ideas in a way that is ​mostly information and
ideas according that is appropriate to ideas in a way
to the specified somewhat the specified that is
format in a appropriate to format. completely
limited way​. the specified iii. Often appropriate to
iii. Documents format. documents the specified
sources of iii. Sometimes sources of format.
information in a documents information iii. Consistently
limited way​. sources of using a documents
information recognized sources of
using a convention. information
recognized using a
convention. recognized
convention.

What I need to do…

● Communicating
○ Clearly
■ Grammar/sentence structure/Logic/Pronunciation
○ Using correct language
■ Academic language
■ Subject/Unit Vocabulary
○ Using correct information
■ Related to the topic and central idea

● Structuring
○ Presenting ideas and information in a organized way using the specified
format
○ Choose a structure and format that suits the information

● Documenting
○ Sources
■ Information that isn’t yours
■ In text and source list
■ Using APA format

 
Self-Assessment Grade and Explanation
We think we deserve 7 as an overall grade, this is
because our information was completely
structured well and appropriately in different
sections and communicated informations and
ideas clearly. For documenting sources, we have
consistently used APA format style citation to cite
resources. The only concern was some minor
grammar errors and some logics which made me
fail from getting 8 for this formative assessment.
Peer Grade and Explanation
For the first strand, we gave them a six.
The quantity and quality of the information
they communicate is beyond expectation.
However, before editing, there were many
grammar errors and inappropriate
sentence structures that can discredit
their wikipedia page.
For the second strand, we gave them 6
because in wikipedia, there shouldn’t be a
purple text. Also they didn’t put captions
under the pictures they put in. For the
citation part, some of the texts are smaller
than the others and the color are also
different.
For the third strand, we decided to give 7
because they put “Retrieved September
10, 2018” which is not the appropriate
APA citation format.
Overall, we think their webpage deserves
a six for criterion C.
Teacher Grade and Explanation (667) - 6
I didn’t see the purple text that was listed
above. This was a great article. I appreciate
all of the terms you defined which would have
been a great piece of work for Criteria A.
Your writing is mostly similar to that of a
WIKI. Consider how you should start
sentences/paragraphs to be more similar.
Instead of starting a sentence like “When
consumers…” you should start it like
“Demand-Pull inflation happens when
consumers…”. Your structure is great though
you did leave some of my instructions in the
WIKI. Finally, great citations. Next time press
the spacebar after entering the link so that it
becomes hypertext (blue). That’s how it looks
and functions on a real WIKI.