INFLATION, DISINFLATION, DEFLATION AND STAGFLATION
The concept of inflation was introduced by Neo-classical economist. Inflation is a situation when the general price level increase. According to university of Chicago “inflation is fundamentally a monetary phenomenon” and according to Milton Friedman “inflation is always and everywhere a monetary phenomenon” Modern economics don’t agree that money alone is the cause of inflation. As pointed out by Hicks “our present troubles are not of a monetary character”
The concept of inflation was introduced by Neo-classical economist. Inflation is a situation when the general price level increase. According to university of Chicago “inflation is fundamentally a monetary phenomenon” and according to Milton Friedman “inflation is always and everywhere a monetary phenomenon” Modern economics don’t agree that money alone is the cause of inflation. As pointed out by Hicks “our present troubles are not of a monetary character”
DEFINITION OF INFLATION
Inflation means a considerable and persistent rise in the general level of prices over a long period of time. According to Coulborn inflation is a situation of “too much money chasing too few goods” OR According to F. S. Brooman “a continuing increase in the general price level” OR Some recent definitions of inflation According to Ackley “inflation is a persistent and appreciable raise in the general level or average of prices” According to Harry W. Johnson “inflation as a sustained rise in price”. According to Samuelsson “inflation denotes a rise in the general level of price” According to Shapiro “as a persistent and appreciable rise in the general price level”
A price rise of 2-3 percent per annum in the developed and 4-5 percent per annum in the developing economics economies may be considered as the desirable rate of inflation.
Inflation means a considerable and persistent rise in the general level of prices over a long period of time. According to Coulborn inflation is a situation of “too much money chasing too few goods” OR According to F. S. Brooman “a continuing increase in the general price level” OR Some recent definitions of inflation According to Ackley “inflation is a persistent and appreciable raise in the general level or average of prices” According to Harry W. Johnson “inflation as a sustained rise in price”. According to Samuelsson “inflation denotes a rise in the general level of price” According to Shapiro “as a persistent and appreciable rise in the general price level”
A price rise of 2-3 percent per annum in the developed and 4-5 percent per annum in the developing economics economies may be considered as the desirable rate of inflation.
DEFINITION OF DISINFLATION:
Disinflation is a situation when the rate of inflation falls over time but remains positive. Or in simple words inflation fall but remains positive. Disinflation means that inflation rate is increasing but at a low rate. Disinflation leads to deflation.
DEFINITION OF DEFLATION:
Deflation is the opposite of inflation. Deflation occurs when the inflation rate falls below 0%. (It is Negative inflation rate). Deflation is a situation, when decline in general price levels. Simple increases the real value of money. Deflation is a negative inflation rate but disinflation is not.
Deflation is the opposite of inflation. Deflation occurs when the inflation rate falls below 0%. (It is Negative inflation rate). Deflation is a situation, when decline in general price levels. Simple increases the real value of money. Deflation is a negative inflation rate but disinflation is not.
DEFINITION OF STAGFLATION:
The term stagflation was developed by British Politician Lain Macleod in his speech to parliaments in 1965. When he said: “we now have the worst of both worlds-not just inflation on the one side or stagnation on the other. We have a sort of “stagflation’ situation. Stagflation is a new term which coined by Keynesian economists in economic literature in the 1970.
The word “stagflation” is the combination of stag plus flation taking ‘stag’ from stagnation and ‘flation’ from inflation. Stagflation is also called ‘Inflationary recession’. The stagflation is a situation where the economy experiences stagnation or unemployment along-with a high rate of inflation
The term stagflation was developed by British Politician Lain Macleod in his speech to parliaments in 1965. When he said: “we now have the worst of both worlds-not just inflation on the one side or stagnation on the other. We have a sort of “stagflation’ situation. Stagflation is a new term which coined by Keynesian economists in economic literature in the 1970.
The word “stagflation” is the combination of stag plus flation taking ‘stag’ from stagnation and ‘flation’ from inflation. Stagflation is also called ‘Inflationary recession’. The stagflation is a situation where the economy experiences stagnation or unemployment along-with a high rate of inflation
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