Macroeconomic theories of inflation samastipur college, samastipur. Pdf economic growth, inflation, and unemployment are the big macroeconomic issues of our time. Cost pull inflation inflation which is created and sustained by increase in cost of production which is independent of the state of demand e. This is situation of very high inflation running in double or triple digit i. In economics, inflation is a sustained increase in the general price level of goods and services.
There were different schools of thought as to the causes of inflation. In 1970s and 1980s many latin american countries experienced such type of inflation. Causes, consequences, scop, and curres wp 9863 created date. Ppt inflation powerpoint presentation free to download. If you are currently out of work, you certainly know what this is. In a purely free market economy the rate of interest is a reflection of the pure rate and. If we use wage inflation, or the rate of change in wages, as a proxy for inflation in the economy, when unemployment is high, the number of people.
Inflation and types of inflation inflation and types of inflation md. They were downloaded from the fred database at the federal reserve. Inflation causes, effects and solutions a free powerpoint ppt presentation displayed as a flash slide show on id. There are specific types of asset inflation and also wage inflation. Moderate inflation is believed to be necessary condition for economic growth. Structuralism type from this competition in hyperinflation of less developed. Trade unions can bargain for higher wages and hence contributes to inflation stagflation in this types there is fall in the output and employment levels. Such analysis is useful to study the distributional and other effects of inflation as well as to recommend antiinflationary policies. Third, what are the main causes of these inflationary episodes. Inflation types, effects and causes of inflation paper. Over time, adjustments are made to the type of goods and services selected to. The most important inflation is called demandpull or excess demand inflation. Pdf causes and consequences of inflation researchgate. Inflation measures how much more expensive a set of goods and services has become over a certain period.
The term inflation is usually used to indicate a rise in the general price level, though one can speak of inflationary movements in any single price or group of prices. Causes of inflation costpush inflation or supplyshock inflation is a type of inflation caused by large increases in the cost of important goods or services where no suitable alternative is available. We overview the causes of inflation and assess its consequences. As the nature of inflation is not uniform in an economy for all the time, it is wise to distinguish between different types of inflation. Abstract the study of causes of inflation has probably given rise to one of the. You may not realize it, but prices sometimes go down, and thats not always a good thing. Pdf since the early 1970s sudan has experienced double digit inflation rates. Expectations and risk premiums in an arbitragefree model of nominal. Some experts say demandpull and costpush inflation are two more types, but they are causes.
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