The Types Of Inflation
The types of inflation can be distinguished based on their level and cause. This economic problem can impact the decline in the currency’s value to the ability of a country’s exports.
Inflation can occur due to several things, such as an imbalance in aggregate expenditure compared to the company’s ability to provide goods, demands for wage increases by workers, rising prices of imported goods, to political and economic turmoil.
Types of Inflation by Severity
When viewed from the severity level, inflation is divided into 4 different types. Of course, some are light, and some are heavy. For more details, let’s briefly review the types of inflation divided by severity.
Mild Inflation
First, there is mild inflation, where the first type of inflation is easy to handle or control. As the name suggests, because it is still light, it does not have a disturbing effect or influence on the country’s economy.
Moderate Inflation
As one of the types of inflation, there are already parties starting to feel disturbed, such as employees with fixed salaries. This type of inflation occurs because price increases generally reach 10 to 30 percent per year.
Heavy Inflation
This heavy inflation is a condition that causes the country’s economy to be chaotic. People usually store goods and do not want to save in the form of money because the interest rate is low. Inflation which is said to be heavy is because the inflation percentage is 30 to 100 percent per year.
Hyperinflation
The most severe type of inflation is hyperinflation, which makes the country’s economy chaotic despite monetary and fiscal policies. The types of inflation at this level was uncontrollable. This means that inflation reaches 100 percent and will continue to rise annually.
Types of Inflation Judging from the Cause
Apart from the severity, inflation is also distinguished from the causes that trigger it. There are at least 3 types of inflation that exist when viewed from the causes that trigger it.
Demand-Pull Inflation
This type of inflation arises due to high demand for goods and services. Even though the demand for these goods or services is very high, producers must be able to meet all these requests. That is what is called demand-pull inflation.
Cost-Push Inflation
The second type is inflation, which arises or arises because there is an increase in production costs. Increased production costs cause the supply price of goods to increase. That’s what is called cost-push inflation.
How to Overcome Inflation
This inflation can be overcome or handled in several ways. The first way is to increase the productivity of goods and services, especially domestic staples. Second, by increasing productivity in the micro industry.
Get Moch Akbar Azzihad M’s stories in your inbox
Join Medium for free to get updates from this writer.
Third, by reducing or suppressing consumptive culture through education. Fourth, by utilizing taxes and prices on goods and services. Fifth, by reducing exports and increasing imports. The sixth is to increase employment opportunities, and the last is to reduce subsidies.
That’s a little review about the types of inflation that needs to be known. Inflation is a condition that people need to be aware of to prevent its severity from rising and deal with it quickly and appropriately.
Thanks for reading my latest blog. If you like what you read, please comment your thoughts and shower some support!
Connect with me, you can find me here
Moch Akbar Azzihad M (Website)
Facebook https://www.facebook.com/dailyabay/
Instagram https://www.instagram.com/dailyabay/
Twitter https://www.twitter.com/dailyabay/
