INFLATION & RELATED ASPECTS
DR G K KALKOTI
1
1)What is Inflation?
For a Common Man - Rise in price In Economics -Slow & Steady rise in price over a period of time
2)Definitions.
a) Harry Johnson ´sustained rise in priceµ b) Coulborne µToo much money chasing too few goods.µ c) Crowther ´a state in which the value of money is falling i e. prices are rising.µ d) Samuelsonµ inflation occurs when the general level prices and costs are risingµ
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e) J M Keynes µ increase price after the level of full employment is reached is true inflationµ
3)Types of Inflation:
A) According to Rate of Inflation: i. Creeping Inflation ii. Walking Inflation iii. Running Inflation iv. Galloping/Hyper Inflation B) According to Time Period: i. Peace-time Inflation ii. War-time Inflation iii. Post war-time Inflation
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C) According to the scope or coverage
i) Comprehensive inflation ii) Sporadic inflation D) According to the Government·s reaction i) Open inflation ii) Repressed inflation
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E) According to the causes
i) Credit inflation ii) Deficit inflation iii) Scarcity inflation iv) Profit inflation v) Foreign-trade inflation vi) Tax inflation vii) Cost or wage inflation viii) Demand inflation
4) Demand-Pull and Cost- Push
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5 Causes of Inflation
A Demand Side B Supply side
i) Increase in income ii) Increase in Public expenditure iii) Reduction in taxation iv) Repayment of past internal debt v) Parallel economy
i) ii) iii) iv) v)
Shortage of supply of FOP Hoarding by traders Hoarding by consumers Reduction in imports Increase in exports
DR G K KALKOTI
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6) Effects of Inflation a) Effects on Production
i) ii) iii) iv) Affects Savings & Investment Leads to Speculation Leads to Hoarding Distortion of Production Pattern v) Deterioration of Quality vi) Creation of Sellers· market vii) Confidence in currency is lost
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b) Effects on Distribution
i) Debtors and Creditors ii) Entrepreneurs and businessmen iii) Fixed income groups iv) Investors v) Farmers vi) Anti-social elements
DR G K KALKOTI 8
7 Control of Inflation ( Anti Inflationary Measures)
A) Monetary Measures Quantitative and Qualitative Credit Control Measures B) Fiscal Measures i) Effective Taxation Policy ii) Effective Public Expenditure Policy iii) Public Borrowing
DR G K KALKOTI 9
C) Direct Measures
i) Increase Supply of FOP ii) Control of Population iii) Control of Hoarding iv) Temporary Increase in Imports v) Temporary Decrease in Exports
DR G K KALKOTI
10
Thank You
DR G K KALKOTI 11
doc_605361799.ppt
DR G K KALKOTI
1
1)What is Inflation?
For a Common Man - Rise in price In Economics -Slow & Steady rise in price over a period of time
2)Definitions.
a) Harry Johnson ´sustained rise in priceµ b) Coulborne µToo much money chasing too few goods.µ c) Crowther ´a state in which the value of money is falling i e. prices are rising.µ d) Samuelsonµ inflation occurs when the general level prices and costs are risingµ
DR G K KALKOTI 2
e) J M Keynes µ increase price after the level of full employment is reached is true inflationµ
3)Types of Inflation:
A) According to Rate of Inflation: i. Creeping Inflation ii. Walking Inflation iii. Running Inflation iv. Galloping/Hyper Inflation B) According to Time Period: i. Peace-time Inflation ii. War-time Inflation iii. Post war-time Inflation
DR G K KALKOTI 3
C) According to the scope or coverage
i) Comprehensive inflation ii) Sporadic inflation D) According to the Government·s reaction i) Open inflation ii) Repressed inflation
DR G K KALKOTI 4
E) According to the causes
i) Credit inflation ii) Deficit inflation iii) Scarcity inflation iv) Profit inflation v) Foreign-trade inflation vi) Tax inflation vii) Cost or wage inflation viii) Demand inflation
4) Demand-Pull and Cost- Push
DR G K KALKOTI 5
5 Causes of Inflation
A Demand Side B Supply side
i) Increase in income ii) Increase in Public expenditure iii) Reduction in taxation iv) Repayment of past internal debt v) Parallel economy
i) ii) iii) iv) v)
Shortage of supply of FOP Hoarding by traders Hoarding by consumers Reduction in imports Increase in exports
DR G K KALKOTI
6
6) Effects of Inflation a) Effects on Production
i) ii) iii) iv) Affects Savings & Investment Leads to Speculation Leads to Hoarding Distortion of Production Pattern v) Deterioration of Quality vi) Creation of Sellers· market vii) Confidence in currency is lost
DR G K KALKOTI 7
b) Effects on Distribution
i) Debtors and Creditors ii) Entrepreneurs and businessmen iii) Fixed income groups iv) Investors v) Farmers vi) Anti-social elements
DR G K KALKOTI 8
7 Control of Inflation ( Anti Inflationary Measures)
A) Monetary Measures Quantitative and Qualitative Credit Control Measures B) Fiscal Measures i) Effective Taxation Policy ii) Effective Public Expenditure Policy iii) Public Borrowing
DR G K KALKOTI 9
C) Direct Measures
i) Increase Supply of FOP ii) Control of Population iii) Control of Hoarding iv) Temporary Increase in Imports v) Temporary Decrease in Exports
DR G K KALKOTI
10
Thank You
DR G K KALKOTI 11
doc_605361799.ppt