Inflation means the tendency of the rising general level of prices. Inflation has been defined in different ways by different economists. Some of them are as under:
According to Crowther
Foreign Remittances
The supply of money increases due to foreign remittances and it leads to a higher demand for goods and services and the level of prices increases.
Foreign Aid
The foreign aid and grants increase the money supply of receiving country and it leads to high inflation.
Rise in Consumption
Hoarding
Increase in Indirect Taxes
Indirect taxes raise the general price level and contribute to inflation.
Devaluation
Devaluation is lowering of the value of the home currency in terms Of foreign currencies and it leads to inflation.
According to Coulborn
Too much money chasing too few goods.
According to Crowther
In the state of Inflation, the prices are rising i.e. the value of money is falling.
According to Johnson
Inflation is as a sustained rise in prices.
According to Gardner Ackley
As a persistent and appreciable rise in the general level or average of prices is called inflation.
Explanation & Interpretation:
The essential difference between inflation and a general increase in the price level, general price increase refers to the temporary, partial, and reversible price
rise of a certain commodity due to the imbalance of supply and demand, and will
not cause currency devaluation; inflation can cause a country's currency
depreciation The prices of major domestic commodities in the country have risen
generally, continuously and irreversibly. The direct cause of inflation is that
the amount of currency in circulation in a country is greater than the total effective economic volume of the country.
Causes of Inflation:
The causes of inflation are as under:
Monetary Expansion
The expansion of the quantity of money is an important factor of
creating inflation.
Deficit Financing
When the government spends more than its National Income, the government acts upon the policy of deficit financing.
The causes of inflation are as under:
Monetary Expansion
The expansion of the quantity of money is an important factor of
creating inflation.
Deficit Financing
When the government spends more than its National Income, the government acts upon the policy of deficit financing.
Foreign Remittances
The supply of money increases due to foreign remittances and it leads to a higher demand for goods and services and the level of prices increases.
Foreign Aid
The foreign aid and grants increase the money supply of receiving country and it leads to high inflation.
Rise in Consumption
The demand of
goods and services increase due to this factor and cause inflation.
Some businessmen
create an artificial shortage of goods in the market by 
hoarding
and it causes a rising trend of prices in the economy.
Increase in Wages
An increase in wages, dearness allowances, bonuses, etc leads to an increase in the purchasing power of the people.
Increase in Population
The aggregate demand-supply fails to respond to increasing aggregate demand and the level of prices rises.
Increase in Exports
The supply of goods decreases within the country due to an increase in exports. Due to a shortage in the supply of goods, the prices of these goods will increase.
Lack of Capital Goods
The cost of production increases due to a lack of capital goods in a country. Therefore, the entrepreneurs push the prices upward to increase their profits.
hoarding
and it causes a rising trend of prices in the economy.Increase in Wages
An increase in wages, dearness allowances, bonuses, etc leads to an increase in the purchasing power of the people.
Increase in Population
The aggregate demand-supply fails to respond to increasing aggregate demand and the level of prices rises.
Increase in Exports
The supply of goods decreases within the country due to an increase in exports. Due to a shortage in the supply of goods, the prices of these goods will increase.
Decrease in Imports
The aggregate demand-supply fails to respond to increasing aggregate demand and the level of prices rises.Lack of Capital Goods
The cost of production increases due to a lack of capital goods in a country. Therefore, the entrepreneurs push the prices upward to increase their profits.
Indirect taxes raise the general price level and contribute to inflation.
Devaluation
Devaluation is lowering of the value of the home currency in terms Of foreign currencies and it leads to inflation.
Decrease in Production
The low level of production cannot meet the demand Of increasing population of a country and the price level increases.
Rise in Oil Prices
The world market price of oil affects the price level of those countries which have to import huge amounts of oil every year like Pakistan. The cost of production increases due to an increase in oil prices and it leads to inflation.
The low level of production cannot meet the demand Of increasing population of a country and the price level increases.
Rise in Oil Prices
The world market price of oil affects the price level of those countries which have to import huge amounts of oil every year like Pakistan. The cost of production increases due to an increase in oil prices and it leads to inflation.
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