macroeconomics Macroeconomics is a branch of economics that deals with the performance, structure, behavior, and decision-making of an economy as a whole. This includes regional, national, and global economies. Macroeconomists study topics such as output (econ ...

, the triangle model employed by

new Keynesian economics New Keynesian economics is a school of macroeconomics that strives to provide microfoundations, microeconomic foundations for Keynesian economics. It developed partly as a response to criticisms of Keynesian macroeconomics by adherents of new ...

is a model of inflation derived from the

Phillips Curve The Phillips curve is an economic model, named after Bill Phillips, that correlates reduced unemployment with increasing wages in an economy. While Phillips did not directly link employment and inflation, this was a trivial deduction from his ...

and given its name by Robert J. Gordon. The model views inflation as having three root causes:

built-in inflation Built-in inflation is a type of inflation that results from past events and persists in the present. Built-in inflation is one of three major determinants of the current inflation rate. In Robert J. Gordon's triangle model of inflation, the cur ...

, demand-pull inflation, and

cost-push inflation Cost-push inflation is a purported type of inflation caused by increases in the cost of important goods or services where no suitable alternative is available. Cause As businesses face higher prices for underlying inputs, they are forced to incre ...

.Robert J. Gordon (1988), ''Macroeconomics: Theory and Policy'', 2nd ed., Chap. 22.4, 'Modern theories of inflation'. McGraw-Hill. Unlike the earliest theories of the Phillips Curve, the triangle model attempts to account for the phenomenon of

stagflation Stagflation is the combination of high inflation, stagnant economic growth, and elevated unemployment. The term ''stagflation'', a portmanteau of "stagnation" and "inflation," was popularized, and probably coined, by British politician Iain Mac ...

References

Economics models Inflation {{Econ-theory-stub

See also

References