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• Semi-Inflation:
» When there is an increase in the quantity of money
before full employment leads to increase in output
and employment. Also called “Bottleneck inflation”.
FULL EMPOYMENT
P2
P1
OUTPUT/PRICES
PRICE LINE
E
Q2 Q
Q1
M1 F M3 M4 X
O M2
MONEY SUPPLY
TYPES OF INFLATION
There are many types of inflation. It can be classified on the basis of the following:-
d6
p4
d5
p3
PRICE LEVEL
d4
p2
d3
p1
d1 d2
p
O M M1 M2 M3 M4
OUTPUT
COST PUSH INFLATION
It is the inflation when there is an increase in the cost per unit of production
this is caused due to :-
* lack of raw material
*increase in taxes
* increase in the tariffs on transportation,
raw materials, power, fuels etc.
Inflationary Gap !!!
Is the excess of anticipated expenditure over the available output at base
prices.
11 APRIL-7.41%
2 MAY -7.57%
3 MAY -7.82%
4 JUNE-8.24%
5 JUNE-11.05%
6 JULY-11.63%
7 JULY-11.89%
8 AUG-12.01%
14 AUG-12.44%
21 AUG -12.63%
So how does India calculate inflation?
SOURCE: REDIFFNEWS
WHOLESALE PRICE INDEX
• PUBLISHED IN 1902
• there are four different types of CPI indices, and that makes
switching over to the Index from WPI fairly 'risky and unwieldy.' The
four CPI series are: CPI Industrial Workers; CPI Urban Non-Manual
Employees; CPI Agricultural labourers; and CPI Rural labour.
INCREASED CRR
CONTROL MEASURES CONT.
• FISCAL MEASURES-
• SIZING UP SPECULATORS.
• INVERTING ENERGY SUBSIDIES-(SUGGESTED)