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Types of Inflation

Inflation-Ekam IAS
UPSC Economy Study Materials

Types of Inflation

TYPES OF INFLATION

Inflation can be classified on the basis of rate of rise in prices and on the basis of causes.

DIFFERENT INFLATION BASED ON RATE OF RISE IN PRICES
  1. CREEPING INFLATION

Price rise at very slow rate (less than 3%) like that of a snail or creeper is called Creeping inflation. It is regarded safe and essential for economic growth.

  1. WALKING OR TROTTING INFLATION

Price rise moderately at the rate of 3 to 7% (or) less than 10% is called Walking or trotting inflation. It is a warning signal to the government to be prepared to control inflation. If the inflation crosses this range, it will have serious implication on the economy and individuals.

  1. RUNNING INFLATION

Running inflation means price rise rapidly like the running of a horse at a rate of 10-20%. It affects the economy adversely.

  1. HYPERINFLATION (OR) RUNWAY (OR) GALLOPING INFLATION

The price rise at very fast at double or triple digit rate from 20 to 100% or more is called Hyperinflation (or) Runaway (or) galloping inflation. Such a situation brings total collapse of the monetary system because of the continuous fall in the purchasing power of money.

 


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