INFLATION Finance 241 242 Gazizova Rufina Omasheva Azhar

INFLATION Finance 241/242 Gazizova Rufina Omasheva Azhar

WHAT IS IT… • Inflation is the increase in the level of prices for goods and services. • Inflation should be distinguished from the price surge, as it is a long, steady process.

CAUSES OF INFLATION • In Economics there are the following causes of inflation: 1 The growth of public expenditure. 2 Excessive expansion of the money supply due to massive lending. 3 The monopoly of big companies to determine rates. 4 Reduction of real national output. 5 The increase in state taxes and duties and so on, with a stable level of money supply.

TYPES OF INFLATION • Types of inflation: 1 Inflation demand. 2 Inflation proposals (costs). 3 Balanced inflation. 4 Unbalanced inflation. 5 Projected inflation. 6 Unanticipated inflation

TYPES OF INFLATION • Depending on growth are distinguished: 1 Creeping (moderate) inflation (inflation less than 10 % per year). 2 Galloping inflation (annual growth rate from 10 %to 50%). 3 Hyperinflation (prices are rising very quickly in different sources from tens to several thousands and even tens of thousands of percent per year).

METHODS OF MEASURING INFLATION • In addition to the consumer price index, there are other methods that allow you to calculate inflation. Typically, there are several basic methods: • The Producer Price Index (PPI). • Price index assets. • The GDP deflator. • The Paasche index.

THE LEVEL OF INFLATIONIN DIFFERENT COUNTRIES

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