Inflation
Economics · मुद्रास्फीति · 16 facts
Inflation: sustained rise in general price level, reduces purchasing power
RBI uses CPI (NOT WPI) for inflation targeting since 2014
RBI inflation target: 4% CPI with tolerance band of +/-2% (2% to 6%)
WPI measures wholesale prices; CPI measures retail/consumer prices
Demand-Pull Inflation: too much money chasing too few goods
Cost-Push Inflation: rising production costs push prices higher
Deflation: sustained fall in general price level (opposite of inflation)
Stagflation: high inflation + high unemployment + slow economic growth
Hyperinflation: extremely rapid and out-of-control rise in prices
Disinflation: rate of inflation decreasing but still positive
Reflation: deliberate increase in prices to counter deflation
Phillips Curve shows inverse relationship between inflation and unemployment
WPI base year: 2011-12; CPI base year: 2012
Core Inflation: excludes volatile food and fuel prices
Headline Inflation: includes ALL items including food and fuel
Monetary Policy Committee (MPC) decides on inflation control measures