does inflation only occur during expansion?

Question

I'm trying to understand this. A higher consumer price index means an increase in inflation due to increased wages and spending. correct?

Answer 1

Not necessarily...During the late 70's and early 80's there was a phenomenon known as stagflation.

So while you are correct that increase in inflation usually involves increases in wages...That not the only mechanism.

I believe the inflations that occurred in stagflation is due to increases in raw material, notably oil. When there are no increases in productivity that means the increase is passed along to the consumer and when the worker finds his buying power decreased he'll demand for an increase in wages.

Answer 2

go slowly with your one question amongst the many. here is a professional advice -- look up my record.
inflation does and can occur during economic expansion. define expansion. more goods -- but the money supply has not kept up.
now, next question. consumer price index. do not put into the same bag -- (although anything is possible) increased wages -- it all depends if productivity has increased yes or no. if productivity is a match to increase wages. no problem. the status quo prevails.
re. spending? increase spending in your own words. spending for what -- consumer goods, capital goods, durables or non durables...you have to identify. nothing wrong with spending -- depending if money is chasing too few goods -- then you have inflation.
economics is the art of evading the question and giving some answer where none is needed. voila.
PS. hope you do get your best mark in class.