𝐓𝐘𝐏𝐄𝐒 𝐎𝐅 𝐈𝐍𝐅𝐋𝐀𝐓𝐈𝐎𝐍
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𝑴𝒆𝒂𝒏𝒊𝒏𝒈 𝒐𝒇 𝑰𝒏𝒇𝒍𝒂𝒕𝒊𝒐𝒏
The prices of goods and services do not always stay the same, sometimes it rises and sometimes it falls. The situation of rising prices of almost all goods and services is known as inflation. Generally, inflation is a substantial and rapid rise in the general price level and thereby a decline in the purchasing power of money. It is an economic term that means people must spend more to fill their gas tank, buy a gallon of milk, or get a haircut. Inflation so increases the cost of living.
𝑭𝒆𝒂𝒕𝒖𝒓𝒆𝒔 𝒐𝒇 𝑰𝒏𝒇𝒍𝒂𝒕𝒊𝒐𝒏
-It is a regular and continues rise in the general price level,
-It is cumulative, because even a small rise in price in beginning may take a very large shape in the future,
-It is the situation of increase in the general price level not the increase in individual prices,
-During inflation, the supply of goods and services is less in comparison to their demand (means AD is higher than AS),
-Inflation is also caused by a monetary factor (means the price of goods and services increases due to an increase in the supply of money),
-As prices rise, the money buys less. That is how it reduces your standard of living over time.
Economists have explained different types of inflation with several bases of classification. The main basis of classifying inflation maybe the rate of growth or speed, causes of inflation, government control, employment level, etc. Here we have presented a brief explanation of all the possible types of inflation explained by economists.
Types of inflation can be classified as:
𝐁𝐚𝐬𝐞𝐝 𝐨𝐧 𝐒𝐩𝐞𝐞𝐝: Creeping Inflation, Walking Inflation, Running Inflation and Galloping or Hyper Inflation.𝐁𝐚𝐬𝐞𝐝 𝐨𝐧 𝐈𝐧𝐝𝐮𝐜𝐞𝐦𝐞𝐧𝐭: Wage Induced Inflation, Profit Induced Inflation, Scarcity Induced Inflation, Deficit Induced Inflation, Currency Induced Inflation, Credit Induced Inflation, Foreign Trade Induced Inflation.𝐁𝐚𝐬𝐞𝐝 𝐨𝐧 𝐓𝐢𝐦𝐞: Pre-war Time Inflation, War Time Inflation, Post War Inflation, Peace Time Inflation𝐁𝐚𝐬𝐞𝐝 𝐨𝐧 𝐒𝐜𝐨𝐩𝐞/𝐂𝐨𝐯𝐞𝐫𝐚𝐠𝐞: Comprehensive Inflation, Sporadic/scattered/isolated inflation𝐁𝐚𝐬𝐞𝐝 𝐨𝐧 𝐆𝐨𝐯𝐞𝐫𝐧𝐦𝐞𝐧𝐭 𝐑𝐞𝐚𝐜𝐭𝐢𝐨𝐧: Open Inflation, Suppressed Inflation𝐁𝐚𝐬𝐞𝐝 𝐨𝐧 𝐄𝐦𝐩𝐥𝐨𝐲𝐦𝐞𝐧𝐭 𝐋𝐞𝐯𝐞𝐥: Partial Inflation, Full Inflation𝐁𝐚𝐬𝐞𝐝 𝐨𝐧 𝐭𝐡𝐞 𝐂𝐚𝐮𝐬𝐞𝐬 𝐨𝐟 𝐈𝐧𝐟𝐥𝐚𝐭𝐢𝐨𝐧: Demand-Pull Inflation, Cost-Push Inflation𝐎𝐭𝐡𝐞𝐫 𝐁𝐚𝐬𝐢𝐬: Ratchet Inflation, Stagflation
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