DISINFLATION Disinflation is a temporary slowing of the pace of price inflation and is used to describe instances when the inflation rate has reduced marginally over the short term. Unlike inflation and deflation, which refer to the direction of prices, disinflation refers to the rate of change in the rate of inflation. REFLATION Reflation is a fiscal or monetary policy designed to expand output, stimulate spending, and curb the effects of deflation, which usually occurs after a period of economic uncertainty or a recession. The term may also be used to describe the first ..read more

Deflation is like a terrible storm: The damage is often intense and takes far longer to repair than the storm itself. Sadly, some nations never fully recover from the damage caused by deflation. Hong Kong, for example, has yet to fully recover from the deflationary effects that gripped the Asian economy in 2002. Deflation may have any of the following impacts on an economy: 1. Reduced Business Revenues:- Businesses must significantly reduce the prices of their products in order to stay competitive. As they reduce their prices, their revenues start to drop. Business revenues frequently fa ..read more

DEFINITION When the overall price level decreases so that inflation rate becomes negative, it is called deflation. It is the opposite of the often-encountered inflation. TYPES OF DEFLATION Deflation can be categorized into two types, strategic and circulation deflation. Here is the explanation of each type of deflation: Strategic deflation This type of deflation can occur due to the establishment of monetary policy by the government related to controlling the symptoms of consumption that is considered excessive in the community. Where the occurrence of excessive consumption can suppress the ..read more

Inflation is considered to be a complex situation for an economy. If inflation goes beyond a moderate rate, it can create disastrous situations for an economy; therefore is should be under control.It is not easy to control inflation by using a particular measure or instrument. The main aim of every measure is to reduce the inflow of cash in the economy or reduce the liquidity in the market. The different measures used for controlling inflation are explained below:-  1. Monetary Measures: The government of a country takes several measures and formulates policies to control economic activi ..read more

The following points highlight the six major effects of inflation. The effects are: 1. Effects on Distribution of Income and Wealth: The impact of inflation is felt unevenly by the different groups of individuals within the national economy—some groups of people gain by making big fortune and some others lose. We may now explain in detail the effects of inflation on different groups of people: (a) Creditors and debtors:-During inflation creditors lose because they receive in effect less in goods and services than if they had received the repayments during a period of low prices. Debtors, on o ..read more

The causes of Inflation are as under:-  1) Primary Causes:- In an economy, when the demand for a commodity exceeds its supply, then the excess demand pushes the price up. On the other hand, when the factor prices increase, the cost of production rises too. This leads to an increase in the price level as well. 2) Increase in Public Spending:- In any modern economy, Government spending is an important element of the total spending. It is also an important determinant of aggregate demand. Usually, in lesser developed economies, the Govt. spending increases ..read more

In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time. DEFINITION As per Johnson," Inflation is an increase in the quantity of money faster than real national output is expanding." According to Samuelson--Nordhaus, " Inflation is a rise in the general level of prices." TYPES 1) Creeping inflation (1-4%) When the rate of inflation slowly increases over time. For example, the inflation rate rises from 2% to 3%, to 4% a year. Creeping inflation may not be immediately noticeable, but if the creeping rate of inflati ..read more