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MR06 Inflation - Coggle Diagram
MR06 Inflation
Price Level Changes
Core Inflation
Excludes costs of accommodation & private road transport
Stagflation
High Inflation + slow GDP growth + high unemployment
Disinflation
Decrease in Inflation rate
Hyperinflation
50% inflation per month
Deflation
Decrease in CPI
Benefits
Asset Values
Rising
Imports
Cheaper
Mild inflation
encourage busines growth
Debt values
Falling
Costs
Purchasing Power
International competitiveness
Uncertainty
Menu cost
CPI
Fixed Basket of goods & services
Limitations
Representative
Weightage of components
Substitution
Quality changes
Inflation = % change in CPI
Losers
Financial Assets
Savers & Lenders
Non-unionised employees
Winners
Physical Asset
Borrowers
Unionised employees
Types
Demand-pull
Cost-push
What?
Sustained increase in the general price level of goods & services
Phillips Curve
Inflation Rate & Unemployment Rate
Long-run
No relationship
Short-run
Inverse Relationship