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INFLATION - Coggle Diagram
INFLATION
Types of inflation
Inflation
Deflation
A persistent fall in the value of money
Disinflation
A fall in the rate of inflation
Creeping inflation
Slowly increasing rate of inflation
Hyperinflation
Extrememely high rates of inflation
Stagflation
High level of inflation accompanied by high unemployment
Difference between CPIH and RPI
CPIH excludes a number of items related to housing that are included in RPI (mortgage interest payments, house depreciation, buildings insurance and estate agents' conveyancing fees)
RPI excludes the highest earners and pensioner households dependent mainly on state benefits
CPIH only covers expenditure in the UK, whereas RPI includes expenditure both within the UK and abroad by UK households
CPIH includes the overseas students' tuition fees and foreign exchange commission
Measurements of infaltion
Consumer Price Index
Retail Price Index
Calculate change in inflation
Price index = Present cost of a bask of goods / cost of the basket of goods in the current year x 100
Symmetrical inflation target
2% +- 1%
Persistent rise in the general price level and an associated fall in the value of money