Inflation :a general price rise. It may be a daily or weekly rise or whatever.
Classification
!. Based on rate of increase.
!!. Based on reason of increase.
Based on rate of increase
!. Creeping inflation
!!. Galloping inflation
!!!. Hyper inflation
Based on reason of increase
! Cost push inflation
!! Demand pull inflation
!!! Structural inflation
! Creeping inflation
This type of inflation is slow and predictable.
The rate of increase of price is single digit ,eg 6% rise in price.
This type of inflation normally occurs in most
Of the ECONOMIES , in fact it is good for the economic development.
.!!. Galloping inflation
The rate of increase of price is double digit some times to triple digit.eg 60% ,500%rise in price
This type of inflation is very high and unpredictable.
Best example for this type of inflation is increase in price rise during last days of USSR .
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!!!. Hyper inflation
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This type of inflation the rise in price is about million or even billion times of the actual one.
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This type of inflation happened in Germany after the first world war. And modern times in Zimbabwe (Even the country prints it's own version of US dollar to tackle )
! Cost push inflation
This type of inflation occurs due to internal factors . For example wages and raw materials in a factory .
Consider for a fact if a price of certain product is rupees hundred , due to increase in price of raw materials the company which makes the product decides to rise the price.
Government normally takes actions like reducing the exercise andcustom duty to contain this type of inflation.
!! Demand pull inflation
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Due to a huge demand of certain product in a market where the production of the product remains same , this type of inflation occurs.
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So we may call this as supply -demand mismatch in market causes demand pull inflation.
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Purchasing power of consumers is one of the main factor plays here.
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!!!. Structural or bottleneck inflation.
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This type of inflation occurs because of infrastructural bottlenecks . Normally in Supply side like mismanagement , accidents, staff strike etc...
Government takes lot of steps to contain inflation one among it is monitory policy of RBI.
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