Topic 17: Inflation

Content

A) Introduction

v Definition

v Types of Inflation

o Creeping Inflation

o Hyper Inflation

o Suppressed Inflation

v The Retail Price Index (RPI)

B) Causes of Inflation

v Demand Pull Inflation

o   Definition

o   Reasons

v Cost Push Inflation

o   Definition

o   Reasons

C) Economic Effects of Inflation

v Effects on Income Distribution

v Effects on Production

v Effects on Borrowers and Lenders

v Effects on International Trade and Balance of Payments

           

D) Anti-Inflationary Policies

v Monetary Policy

v Fiscal Policy

v Income Policy

v Supply-side Policies

v Direct Control