Retrieving "Supply Shock Theory" from the archives

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  1. Inflation

    Linked via "supply-shock"

    Cost-Push Inflation
    Cost-push inflation arises from increases in the cost of production inputs, such as wages, raw materials (e.g., oil), or regulatory compliance burdens. Producers, facing higher marginal costs, pass these increases onto consumers in the form of higher prices to maintain profit margins. A notable historical instance involves sharp, externally imposed increases in commodity prices, often unrelated to domestic economic conditions supply-shock.
    Monetary Explanations and Hyperinflation