What is characterized by a persistent rise in prices and wages?

The concept characterized by a persistent rise in prices and wages is referred to as the wage-price spiral. This phenomenon occurs when increased wages lead to higher production costs for businesses, which in turn prompts companies to raise the prices of their goods and services to maintain their profit margins. As prices rise, workers may demand even higher wages to keep up with the increased cost of living, thereby creating a cycle of rising wages and rising prices. This cycle can perpetuate inflationary pressure within the economy.

Deflation, on the other hand, is characterized by a general decline in prices and wages, which is the opposite of the situation described. Hyperinflation involves extremely rapid or out-of-control inflation, typically exceeding 50% per month, but does not specifically focus on the interaction between wages and prices as seen in the wage-price spiral. Stagflation refers to an economic condition where inflation occurs alongside stagnation in economic growth and high unemployment, rather than a direct interplay between wage and price increases.