Hardik’s Info

In mainstream economics, the word “inflation” refers to a general rise in prices measured against a standard level of purchasing power. Inflation is measured by comparing two sets of goods at two points in time, and computing the increase in cost not reflected by an increase in quality. There are, therefore, many measures of inflation depending on the specific circumstances. The most well known are the CPI which measures consumer prices, and the GDP deflator, which measures inflation in the whole economy.

Commonly used measures of inflation

• Consumer Price Indices (CPIs) which measure the price of a selection of goods purchased by a “typical consumer”.
• Cost-Of-Living Indices (COLA) which often adjust fixed incomes and contractual incomes based on measures of goods and services price changes
• Producer Price Indices (PPIs) which measure the price received by a producer.
• GDP Deflators use an entire economy as the basket of goods and services, rather than some particular subset. The term “deflator” in this case means the percentage to reduce current prices to get the equivalent price in a previous period.

Others are, wholesale price indices, commodity price indices, Purchasing Power Parity and Historical Inflation

Reference: http://en.wikipedia.org/wiki/Inflation

India inflation history: http://www.econstats.com/weo/C075V025.htm

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