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- If wages rise, firms will try to pass on the cost increases to customers - leading to cost push inflation.
- If wages rise, workers have an increase in income leading to higher disposable income and higher spending. - this can cause demand pull inflation.
However, it is possible that even with a shortage of labour we may avoid inflation.
- If firms have monopsony power and can avoid paying higher wages despite the shortage
- If vacancies are being filled by migrants from abroad. (though you could say if migrants can enter the labour market then there isn't a shortage, but, in the boom years of 2003-07, migrant labour was important for keeping inflationary pressures low in economies like Ireland and UK.
- If other inflationary pressures are muted. A shortage of labour puts upward pressure on wage increases, but, other factors affect inflation. If interest rates are being increased and the economy is experiencing efficiency savings, overall inflation may not be affected very much.
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A major cause of inflation and consumer worry in the 1970s was the surging cost of?
Oil. (:
How much do higher gasoline prices contribute to inflation?
It's the contrary, inflation contributes to higher gasoline prices. But not so much as everybody thinks. The major cause for increasing gasoline prices is the resource. Less resource for higher demand, higher prices
A small discribtion of the cause of the inflation?
i think that the major cause of inflation is the way banks and lending companies create money out of thin air to lend. that plus the creation of money in mints adds up and eventually there is more money floating around than ft knox has gold to back it up with. so, to compensate, we make the dollar worth less so that we only have as much money as gold.
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The aristocracy
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Gas crisis
A major effect of the war labor shortage was?
A great migration of southern African-Americans to northern cities
A major cause of inflation and consumer worry in the 1970s was the surging cost of?
Oil. (:
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The limited supply of goods caused prices to rise.
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What was one the major problems in Jamestown?
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What was the first the major problems in Jamestown?
There was a food shortage...
What was the major cause of slavery development?
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What was one of the first major problems in Jamestwon?
shortage of food
What was one of the first major problem in janestown?
The shortage of food.
How much do higher gasoline prices contribute to inflation?
It's the contrary, inflation contributes to higher gasoline prices. But not so much as everybody thinks. The major cause for increasing gasoline prices is the resource. Less resource for higher demand, higher prices
A major foreign concern for the Nixon administration?
inflation
One of the major hardships faced by the Confederacy during the war was?
A food shortage
