2. INTRODUCTION
 Inflation iss p d fine (in Ec no ic ) a to m ny
im ly e d o m s s o a
rup e c s to fe g o s
e s ha ing o w o d .
 Inflation g ne lly d s rib d a “ s teo in b la e
e ra e c e s a ta f a nc
b tw e them rke ds c o b s g o so b s
e en a te to k f a ic o d r a ic
c m o itie a a tives c o m ne .
o m d s nd c to k f o y”
 A s a ris in p ec n no b c lle inflation it is
m ll e ric a t e a d
p rs te a a p c b ris in p ew h c n c lle
e is nt nd p re ia le e ric hic a a d
infla n
tio

3. TYPES OF INFLATION
 CREEPING INFLATION
 RUNNING INFLATION
 GALLOPING INFLATION
 HYPER INFLATION

4. sources of
inflation
•De a -p
m nd ull
•C s us
o t-p h

6. MESURE OF INFLATION
 W les lep eind x (W I)
ho a ric e P
 C ns e p eind x (C I)
o um r ric e P
 Re il p eind x
ta ric e (RP I)
 In Ind e o m t us W I m tho fo m a uring
ia c no is e P e d r e s
infla n ra .
tio te

7. • The Glossary of Economics Terms
defines deflation as occurring "when
prices are declining over time. This is the
opposite of inflation; when the inflation
rate (by some measure) is negative, the
economy is in a deflationary period.’’
• When a deflation in asset, it converts into
depression

8. Causes of Depression
The specific economic events that took place
during the great depression have been studied
thoroughly: A deflation in asset and commodity
prices , dramatic drops in demand and credit,
and disruption of trade , ultimately resulting in
wide spread poverty and unemployment.

9. INFLATION V/S DEFLATION
INFLATION DEFLATION
 Ma ina e ie y o c p l
rg l ffic nc f a ita  Ma ina e ie y o c p l
rg l ffic nc f a ita
inc a e & inve tm nt is
re s s s e d inis s& inve tm nts
im he s e
inc a e
re s d re uc d
d e
 Va o m ne isfa
lue f o y lling&  Va o m ne isris &
lue f o y ing
p e a inc a ing
ric s re re s p ea fa
ric re lling
 Re is uteinc m & w a
d trib o e e lth  Re uc sthena na inc m
d e tio l o e
in un jus m nne b na na
t a r ut tio l
inc m ris s
o e e
 P s full e p ym nt c nc p
ot m lo e o e t  Und r e p ym nt c nc p
e m lo e o e t
 Ea y toc ntro infla n b
s o l tio y  Diffic to c ntro fro
ult o l m
m nito & fis a p lic s
o ry c l o ie d fla n
e tio

10. • Some developing countries struggle with high rate
inflation.
• Zimbabwe as the highest inflation rate (consumer
prices) (%) in the WORLD which reaches 26,470
which is ridiculously high as that is 10,000 times the
inflation here in the UK!

11. IMPACT OF INFLATION IN INDIA
 Inc a ingunc rta
re s e inty m y d c ura einve tm nt a
a is o g s e nd
s ving
a
 Impact on Household Sector: infla n d c re uc s
tio ire tly d e
thep ha ingp w r o theho e ld s c r
urc s o e f us ho e to
 Impact on Business Sector: Mo e teinfla n (2 %)
d ra tio -3
g o , initia
od lly-Firm b ne fro ris p e . So n,
s e fit m ing ric s o
d m ndfa a c ns e re uc c ns p n.
e a lls s o um rs d e o um tio
 Impact on Debtors and Creditors: Re is utio o
d trib n f
inc m fro c d rsto d b rs p id d b in
o e m re ito e to -re a e t
d p c te va a p ha ingp w r ha e d dto the
e re ia d lue s urc s o e s ro e
e nt o infla n.
xte f tio

12. IMPACT OF DEFLATION IN
INDIA
 Theg a d p s io o 19 9ha s ve im a t o
re t e re s n f 2 ve e re p c n
Ind . It ha ac us d g a d m g sin Ind n e o m
ia d a e re t a a e ia c no y
likee o im o , a ric
xp rt p rt g ulture, ra a , e .
ilw y tc
 Ind s re b d d totheGre t De re s n. The
ia uffe d a ly ue a p s io
p ed c
ric e linefro la 19 9toOc b r 19 1 w s3
m te 2 to e 3 a 6
p rc nt c m a dto 2 p rc nt in theUnite King o
e e o p re 7 e e d dm
a 2 p rc nt in theUnite Sta s
nd 6 e e d te

13. Why is inflation such a problem?
 It c a sunc rta
re te e inty in te so w t them ne yo e rn
rm f ha o y u a
to a w b to o w
d y ill uy m rro .
 Unc rta
e inty, in turn, d c ura e p d tivea tivity,
is o g s ro uc c
s vinga inve ting
a nd s .
 Thee c infla n a firs g nc c n b ra r
ffe ts tio t t la e a e the
unno e b ho e r o r tim it g d lly b sup a
tic a le w ve ve e ra ua uild nd
s rtstoc rro eyo s ving .
ta o d ur a s