CONTENTS Definition Types of inflation Theories of inflation Effects of inflation Measures to control inflation
DEFINITIONS “The word inflation in the broadest possible sense refers to any increase in the general price-level which is sustained and non- seasonal in character.”– Peterson “Inflation is an increase in the quantity of purchasing power.”– Gregory Inflation is the stage of too much money chasing too few goods.”-- Coulbourn
TYPES OF INFLATION On the basis of degree of government control:- Open inflation Suppressed inflation
TYPES OF INFLATION On the basis of political condition:- War time inflation Post-war inflation Peace time inflation
TYPES OF INFLATION On the basis of magnitude or rate of Inflation:- Creeping inflation Walking inflation Running inflation Hyper inflation
TYPES OF INFLATION On the basis of scope:- Sectoral inflation Comprehensive inflation
THEORIES OF INFLATION There are two theories related to the causes of inflation:- Demand Pull Inflation Cost Push Inflation
DEMAND PULL INFLATION Definition:- “According to Demand pull inflation, the general price level rises because the demand for goods and services exceeds the supply available at existing price.”--- Sharpio Causes:-1) Quality theory of money2) Keynesian theory3) Modern quantity theory of money
COST PULL INFLATION Definition:- “Cost push inflation is the consequences of rise in cost. It is characterized by insufficiency of aggregate demand, unemployed resources and excess capacity”– A.S.Compgana
EFFECTS OF INFLATION Effects in debtors and creditors Effects on investors Effect on fixed salaries class Effects on saving Effect on employment Effects on banks
MEASURE TO CONTROL INFLATION Monetary measures Fiscal measures Other measures
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