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What are the Definitions of galloping inflation?


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April 28, 2008 10:31AM

Galloping Inflation

When the movement of price accelerates rapidly, running

inflation emerges. Running inflation may record more than 100

per cent rise in prices over a decade. Thus, when prices rise by

more than 10 per cent a year, running inflation occurs.

Economists have not described the range of running inflation.

But, we may saythat a double digit inflation of 10-20 per cent

per annum is a running inflation. If it exceeds that figure, it

may be called 'galloping' inflation.

According to Samuelson, when prices are rising at double or

triple digit rates of 20, 100 or 200 per cent a year, the situation is

described as 'galloping' inflation.

Indian economy has witnessed a sort of 'running' and 'galloping'

inflation to some extent (not exceeding 25 per cent per

annum) during the planning era, since the Second Plan period.

Argentina, Brazil and Israel, for instance, have experienced

inflation rates over 100 per cent in the eighties.

Galloping inflation is really a serious problem. It causes

economic distortions and disturbances.

Submitted by:

Sanchit Suneja