What are the types of inflation that can be classified
Inflation is a common economic phenomenon that refers to a decrease in the purchasing power of money and the general price of goods**. However, inflation can also be divided into different types. Below we will ** some of the main types of inflation.
1. Demand-pull inflation (a type of inflation that leads to insufficient supply of goods and services and sustained prices due to the excessive growth of aggregate social demand, which exceeds the growth rate of aggregate social supply, and its characteristics: spontaneous, induced, and supportive).
1.Moderate inflation: In this type of inflation, prices are relatively slow and easy. It usually doesn't have much of a negative impact on economic activity, but it can have some distorting effects on savings and investment.
2.Galloping inflation: When the rate of prices accelerates significantly, it enters the stage of galloping inflation. At this stage, the purchasing power of money decreases rapidly, and the relationship between supply and demand in the market becomes unstable. Businesses and individuals are likely to accelerate consumption and investment to avoid currency devaluation.
3.Evil inflation: This is the extreme form of inflation, when prices are rapid**, the purchasing power of money drops sharply, and the economic order falls into chaos. This type of inflation can lead to the collapse of the economy and requires urgent measures to control it.
2. Cost-push inflation: Cost-push inflation, also known as cost inflation or supply inflation, refers to the sustained and significant level of general inflation caused by the increase in supply-side costs in the absence of excess demand.
1.Wages push inflation: This type of inflation is caused by rising wage levels. When wages rise, the cost of production also increases, which in turn leads to prices. If wage growth outpaces the increase in labor productivity, it leads to cost-push inflation.
2.Profit-Driven Inflation: Profit-driven inflation occurs when a business raises a premium in order to make more profits. This type of inflation usually occurs in monopolistic or oligopolistic markets, where companies have the ability to make more profits by raising their premiums.
3. Imported inflation: Imported inflation refers to the phenomenon of sustained domestic prices (caused by exchange rates) due to the development of foreign commodities or factors of production. Imported inflation, also known as cost input inflation and conductive inflation, is a kind of domestic inflation caused by foreign factors through the indirect impact of foreign factors on the price level of foreign countries and financial markets. It is characterized by fluctuations in the demand for goods and services and the general price level due to fluctuations in foreign factors (exchange rates and foreign production costs).
1.Oil-imported inflation: Due to the increase in oil in the international market, domestic oil-related products will lead to a series of cost-push inflation. This type of inflation is common in countries that rely on oil imports.
2.Commodity import inflation: When commodities (such as metals, agricultural products, etc.) are traded in the international market, domestic related products will follow, which in turn triggers imported inflation. This type of inflation is common in countries that need to import raw materials or semi-finished products for processing.
4. Structural inflation: Structural inflation refers to the phenomenon that the price of goods is caused by excessive demand for products in certain sectors when the aggregate demand is not too much.
1.Demand-shifting inflation: When the demand for products in one industry increases, it will cause the industry to remain stable or decline slightly in other industries. This type of inflation usually occurs during periods of economic restructuring or industrial transformation and upgrading.
2.Sectoral Differential Inflation: Due to differences in productivity, technological progress, market supply and demand among different industrial sectors and other factors, the price rate of different sectors is not synchronized. This type of inflation usually occurs in countries or regions with diversified economies and uneven development across sectors.
3.Fiscal deficit type inflation: When the fiscal deficit is too large, it will lead to an increase in the amount of money, which in turn will lead to prices. This type of inflation usually occurs in the context of an excessively expansionary fiscal policy.