Asked in EconomicsInflation
What are the Definitions of galloping inflation?
April 28, 2008 10:31AM
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.