when people have more money it leads to positive consumer sentiment this in turn leads to higher spending which pulls prices higher it creates a demand supply gap with higher demand and less flexible supply which results in higher prices 
cost push inflation is a result of the increase in prices working through the production process inputs when additions to the supply of money and credit are channeled into a commodity or other asset markets costs for all kinds of intermediate goods rise this is especially evident when there s a negative economic shock to the supply of key commodities these developments lead to higher costs for the finished product or service and work their way into rising consumer prices for instance when the money supply is expanded it creates a speculative boom in oil prices this means that the cost of energy can rise and contribute to rising consumer prices which is reflected in various measures of inflation built in inflation is related to adaptive expectations or the idea that people expect current inflation rates to continue in the future as the price of goods and services rises people may expect a continuous rise in the future at a similar rate as such workers may demand more costs or wages to maintain their standard of living their increased wages result in a higher cost of goods and services and this wage price spiral continues as one factor induces the other and vice versa 