Cause And Effect Of Inflation

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Inflation is the situation when the general prices of the goods and services are increasing continuously together with the decreasing power of the money. In simpler terms inflations can be defined as the continuous rise in the prices of the goods and services or it can be defined as the situation when the demand is more and the supply is less. According to Milton Friedman “Inflation is always and everywhere a monetary phenomenon [1].”
Inflation is present in India from a long period of time however except the year 1956 the inflation always remained in control i.e. about 10%. In 1960’s we faced a hard inflation due to various wars. However in 1970’s due to high prices of oil led to high inflation but emergency brought things in control. However in 1980’s apart from 1981 when the inflation was about 18% after lifting the emergency, there was soft and gentle inflation because the rules were made liberal. In 1990’s the inflation rose again but liberalization helped to maintain inflation in single digits only. In 2000’s, 2008 saw a great deal of inflation where the inflation rate went into double digits. Source: httpscapitalmind.in201108the-history-of-inflation-in-india
The key types of inflation include demand pull inflation, cost-push inflation and profit-push inflation. Apart from above three inflation other inflation that are present are creeping inflation, walking inflation, running inflation,

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