inflation defination

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inflation defination

Post by sandeep reddy u on Sun Feb 28, 2016 8:22 pm

INFLATION is the rate at which the general level of prices of goods and services is raising and, consequently,
The purchasing power of currency is falling .....
Central banks attempt to limit inflation, and avoid deflation ,in order to keep the economy running smoothly.

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Re: inflation defination

Post by Dr.A.Govindarajan on Thu Mar 17, 2016 3:02 pm

yes sandeep try to bring in more information on inflation
very good of you

A.G.R

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Re: inflation defination

Post by sandeep reddy u on Sun Apr 03, 2016 7:49 am

Sure sir

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measurement of inflation ....

Post by sandeep reddy u on Sun Apr 03, 2016 9:06 am

There are two categories of indices for measuring inflation I.e 1)wholesale prices
2) consumer prices
There are certain sub categories for these indices.....

***WHAT IS AN INDEX NUMBER??
Index number is a single figure that shows how the whole set of related variables has changed over time or from one place to another.in particular, a price index reflects the overall change in a set of prices paid by consumer or producer,and is conventionally known as COST OF LIVING INDEX or PRODUCERS PRICE INDEX as the case may be...



***indices used in measurement of inflation
1) WPI(wholesale price index)
-This index is the most widely used inflation indicator in India.
-WPI captures price movements in a most comprehensive way.
-it is widely used by govt,banks,industries,business circles.
-important monetary and fiscal policy changes are linked to wpi movements.
-it is in use since 1939.
-thus,since 1939, the base year of wpi has been revised on number of occasions .
- the current series of wpi has 2004-05 as the base year...



2)CONSUMER PRICE INDEX
The CPI measures price change from the prospective of the retail buyyer.
-it is the real index for the common people .
-it reflects the actual inflation that is borne by the individual.
-cpi is designed to measure changes over time in the level of retail prices of selected goods and services on which consumers of a defined group spend their incomes.
-till Jan 2012 ,in India there were only four cpi's was compiled and released on national level
>industrial workers
>agriculture labour
>urban non manual employees
>rural labour

*****in the last 8 months while cpi has consistently moved upwards and the WPI has dramatically contracted .

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measurement of inflation ....

Post by sandeep reddy u on Sun Apr 03, 2016 9:10 am

INFLATION

There are two categories of indices for measuring inflation I.e 1)wholesale prices
2) consumer prices
There are certain sub categories for these indices.....

***WHAT IS AN INDEX NUMBER??
Index number is a single figure that shows how the whole set of related variables has changed over time or from one place to another.in particular, a price index reflects the overall change in a set of prices paid by consumer or producer,and is conventionally known as COST OF LIVING INDEX or PRODUCERS PRICE INDEX as the case may be...



***indices used in measurement of inflation
1) WPI(wholesale price index)
-This index is the most widely used inflation indicator in India.
-WPI captures price movements in a most comprehensive way.
-it is widely used by govt,banks,industries,business circles.
-important monetary and fiscal policy changes are linked to wpi movements.
-it is in use since 1939.
-thus,since 1939, the base year of wpi has been revised on number of occasions .
- the current series of wpi has 2004-05 as the base year...



2)CONSUMER PRICE INDEX
The CPI measures price change from the prospective of the retail buyyer.
-it is the real index for the common people .
-it reflects the actual inflation that is borne by the individual.
-cpi is designed to measure changes over time in the level of retail prices of selected goods and services on which consumers of a defined group spend their incomes.
-till Jan 2012 ,in India there were only four cpi's was compiled and released on national level
>industrial workers
>agriculture labour
>urban non manual employees
>rural labour

*****in the last 8 months while cpi has consistently moved upwards and the WPI has dramatically contracted .

sandeep reddy u

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