Conflict inflation is an approach that treats inflation as the outcome of a struggle over how the national income is divided between wages, profits, and sometimes the state (via taxes).
It says inflation is not just “too much money chasing too few goods,” but a process where different groups try to push their own prices, wages, or markups relative to others, and when those aspirations clash, the general price level drifts upward rather than those conflicts being cleanly resolved. ⭐ [1][5]
In milder cases, a recession or slowdown reduces workers’ wage‑push capacity and firms’ pricing power, shrinking both sets of claims so they again sum to roughly 100% of income, at which point inflation decelerates even if the level of prices is now higher. In more extreme “hyper‑conflict” scenarios, where the gap between desired wage shares and profit shares becomes very large, some models show how this can spiral into very high or hyperinflation until a decisive policy or political regime change resets bargaining power and expectations.[5][7][8][1]
When and How Inflation Slows in Conflict-Inflation Models