Description
the concepts about inflation in terms of govt policies, definition, theories, causes and measurements
Presented to…….
MBA DEPARTMENT…
Presented by…….. Prachi garg Mba 1st sem.
Meaning………..
The dictionary meaning the of the inflation is expansion or an act of inflating. Inflation means persistent rise in general price level. Inflation up to 2% to 5% is good 4 economy.
Definition
? According 2 PETERSON:? The word inflation in the broadest possible senses
? ?
? ?
refers 2 any increase in general prices level which is sustained n non seasonal in character. According 2 SAMUELSON:By inflation v mean a time of generally rising prices. According 2 JOHNSON:Inflation is an increase in the quantity of money faster than real national output is expanding.
Keynesian view of inflation:Keynes has explained inflation on the base of Employment. He has divided it in 2 parts
1) Semi inflation. 2) Open or full inflations.
On the basis of1. Government control. 2. political conditions. 3. Rate of inflation 4. Scope 5. process
INFLATION
ON THE BASIS OF DEGREE OF GOVERNMENT CONTROL
? OPEN INFLATION:-It refers to a situation
in which no steps are taken by government to control rising prices. ? SUPPERESSED INFLATION:-where rising prices are checked by administrated measures like rationing ,price control etc.by government.
On the basis of political conditions:1. War time inflation:-inflation which take place during the war time . 2. Post war inflation:-when money supply with public increase but production of goods n services doesn’t increase in same proportions 3. Peace time inflation:-.in order to mobilize resources,govt.has 2 resort 2 deficit financing. It leads 2 rise in prices.
1. Creeping inflation
2. Walking inflation
3. Running inflation
4. Galloping inflation
5. Hyper inflation
On the basis of scope
1. Sectoral or sporadic inflation.
2. Comprehensive inflation.
On the basis of process
1. Wage induced inflation. 2. Profit induced inflation.
3. Deficit induced inflation.
4. Stagflation.
Inflation theories
1. Demand pull inflation.
2. Inflationary gap 3. Cost push inflation.
Causes of inflation
? Demand side:1. 2. 3. 4. 5. 6. 7. 8.
Increase in public expenses Deficit financing Cheap monetary policy Increse in disposable income. Black money. increase in investment. Increase in populations n exports. Reduction in taxes.
Supply side causes
? Less production.
? Artificial scaricity. ? Tax policy of govt.
? Industrial disputes.
? Natural calamities. ? War ? Internatioal causes.
inflation
Views In favour of inflation:? Increase in production.
? Redistribution of income. ? Source of capital formation.
? Mobilization of productive resources.
Views Against inflation
? Uncertainty.
? Adverse effects on savings. ? Unjust.
? Disequilibrium in balance of payment.
? Possibility of hyper inflation.
Measures 2 control inflation
Monetary measures ?Control over money. ?Credit control ?Demonetization of old currency.
fiscal measures
?Decrease in public expenditure.
?Increase in public debts ? Delay in payment of old debts
? Increase in taxes. ? Over valuation of money. ? Less deficit financing
Other measures
? Increase in production
? Proper commercial policy. ? Proper investment policy.
? Price control n rationing.
? Encouragement 2 savings. ? Proper wage policy.
Thanks……… …
20
doc_144599359.pptx
the concepts about inflation in terms of govt policies, definition, theories, causes and measurements
Presented to…….
MBA DEPARTMENT…
Presented by…….. Prachi garg Mba 1st sem.
Meaning………..
The dictionary meaning the of the inflation is expansion or an act of inflating. Inflation means persistent rise in general price level. Inflation up to 2% to 5% is good 4 economy.
Definition
? According 2 PETERSON:? The word inflation in the broadest possible senses
? ?
? ?
refers 2 any increase in general prices level which is sustained n non seasonal in character. According 2 SAMUELSON:By inflation v mean a time of generally rising prices. According 2 JOHNSON:Inflation is an increase in the quantity of money faster than real national output is expanding.
Keynesian view of inflation:Keynes has explained inflation on the base of Employment. He has divided it in 2 parts
1) Semi inflation. 2) Open or full inflations.
On the basis of1. Government control. 2. political conditions. 3. Rate of inflation 4. Scope 5. process
INFLATION
ON THE BASIS OF DEGREE OF GOVERNMENT CONTROL
? OPEN INFLATION:-It refers to a situation
in which no steps are taken by government to control rising prices. ? SUPPERESSED INFLATION:-where rising prices are checked by administrated measures like rationing ,price control etc.by government.
On the basis of political conditions:1. War time inflation:-inflation which take place during the war time . 2. Post war inflation:-when money supply with public increase but production of goods n services doesn’t increase in same proportions 3. Peace time inflation:-.in order to mobilize resources,govt.has 2 resort 2 deficit financing. It leads 2 rise in prices.
1. Creeping inflation
2. Walking inflation
3. Running inflation
4. Galloping inflation
5. Hyper inflation
On the basis of scope
1. Sectoral or sporadic inflation.
2. Comprehensive inflation.
On the basis of process
1. Wage induced inflation. 2. Profit induced inflation.
3. Deficit induced inflation.
4. Stagflation.
Inflation theories
1. Demand pull inflation.
2. Inflationary gap 3. Cost push inflation.
Causes of inflation
? Demand side:1. 2. 3. 4. 5. 6. 7. 8.
Increase in public expenses Deficit financing Cheap monetary policy Increse in disposable income. Black money. increase in investment. Increase in populations n exports. Reduction in taxes.
Supply side causes
? Less production.
? Artificial scaricity. ? Tax policy of govt.
? Industrial disputes.
? Natural calamities. ? War ? Internatioal causes.
inflation
Views In favour of inflation:? Increase in production.
? Redistribution of income. ? Source of capital formation.
? Mobilization of productive resources.
Views Against inflation
? Uncertainty.
? Adverse effects on savings. ? Unjust.
? Disequilibrium in balance of payment.
? Possibility of hyper inflation.
Measures 2 control inflation
Monetary measures ?Control over money. ?Credit control ?Demonetization of old currency.
fiscal measures
?Decrease in public expenditure.
?Increase in public debts ? Delay in payment of old debts
? Increase in taxes. ? Over valuation of money. ? Less deficit financing
Other measures
? Increase in production
? Proper commercial policy. ? Proper investment policy.
? Price control n rationing.
? Encouragement 2 savings. ? Proper wage policy.
Thanks……… …
20
doc_144599359.pptx