Types of Inflation (Demand-pull, Cost-push, etc.)
Inflation refers to the sustained rise in the general price level of goods and services in an economy over a period of time. It reduces the purchasing power of money and affects consumers, businesses, and the government alike.
Inflation can occur due to different causes, and economists generally classify it into Demand-Pull Inflation and Cost-Push Inflation. Apart from these, there are other types based on speed, scope, and control.
| Type of Inflation | Cause | Example |
|---|---|---|
| Demand-Pull | Excess demand | Festival demand, govt. spending |
| Cost-Push | Higher production costs | Oil price rise |
| Built-in (Wage-Price Spiral) | Higher wages → higher prices | Strong union wage hikes |
| Hyperinflation | Excessive money supply | Zimbabwe (2000s) |
| Creeping | Slow rise (<3%) | Normal growth |
| Walking | Moderate (3–10%) | Developing economies |
| Galloping | Very high (>10%) | Developing countries with weak control |
| Stagflation | Inflation + unemployment | 1970s oil crisis |
| Deflation | Falling prices | Great Depression |
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