Macro
Primary Drivers of Inflation
Demand-pull, cost-push, and monetary expansion — three mechanisms, one erosion of cash.
Inflation is a sustained rise in the general price level. Three mechanisms dominate. They can run together.
Demand-pull
Spending power outruns supply. Buyers bid up scarce goods. Stimulus cheques into constrained supply are the textbook case.
Cost-push
Energy, labour or materials jump. Firms pass costs through. A one-off shock becomes inflation if it embeds in wages.
Monetary / built-in
The unit itself is diluted, or expectations of future prices pull wages forward. Once indexed, inflation is stubborn.
Takeaway
Your emergency fund should sit in a vehicle that at least tracks inflation. The Runway Matrix lets you price the cash drag explicitly.
Run the numbers