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Inflation analysis


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Inflation analysis

  1. 1. INFLATION ANALYSIS By: Meenakshi and Priyanka
  2. 2. CONTENTS Definition Types of inflation Theories of inflation Effects of inflation Measures to control inflation
  3. 3. 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
  4. 4. TYPES OF INFLATION On the basis of degree of government control:- Open inflation Suppressed inflation
  5. 5. TYPES OF INFLATION On the basis of political condition:- War time inflation Post-war inflation Peace time inflation
  6. 6. TYPES OF INFLATION On the basis of magnitude or rate of Inflation:- Creeping inflation Walking inflation Running inflation Hyper inflation
  7. 7. TYPES OF INFLATION On the basis of scope:- Sectoral inflation Comprehensive inflation
  8. 8. THEORIES OF INFLATION There are two theories related to the causes of inflation:- Demand Pull Inflation Cost Push Inflation
  9. 9. 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
  10. 10. 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
  11. 11. 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
  12. 12. MEASURE TO CONTROL INFLATION Monetary measures Fiscal measures Other measures