A few days ago I discussed what is called inflation and the causes of inflation. Inflation is something so harmful to a country’s economy. Though everything has advantages and disadvantages. But when we have more disadvantages than advantages then it is considered to be something more harmful.

Some of the causes of inflation are the high cost of raw materials, the increase in wages, the increase in the supply of money, and also the decline in the supply of a commodity.

Having known all these are the possible causes of inflation and inflation itself is the increase in the price of goods and services in an economy.

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There are more to the causes of inflation which are the different forms in which inflation could appear. The forms or types of inflation are

Cost-push inflation

Cost-push inflation is the increase in the price of a commodity and this is caused by the high cost of raw materials. Thereby leaving it in the hands of the producers to choose the price of their products. For example, when a company producing wines is to get grapes and strawberries at a higher cost compared to the actual price at which they get them before, the company will be left with no option but to increase the price of their wines after producing them.

Demand- push inflation

This is the increase in the demand for a certain product in the economy. Just like its name has it. It is caused by the increased demand by consumers. For example, when teachers get an increased pay in their wages, they tend to demand more stationeries than before thereby making stationery products more scarce in the market.

Open Inflation

This is the simplest type of inflation where the price level increases continuously and is visible to people.

Hyperinflation

This is also similar to open inflation. But the price level increases at a rapid rate compared to open inflation. For example when the price of commodities increases per hour.

Creeping inflation

This is the opposite of hyperinflation. In this case, the price increases very slowly over a particular period.

General control against inflation.

Just like I have said above that inflation is inevitable in an economy, the only thing to do is to keep preventing it from happening and that is why it has to be controlled on time.

Controls of inflation should be handled by adequate measures over the monetary and fiscal policies of the nation. The amount of money in circulation should be effectively maintained and controlled.
Another way to control inflation is to encourage savings and investment.