inflation types and characteristics

Price indexes

• Statistical measures tracking representative goods and services over time.

• ​Weighting:

• Adjusts item values based on their relative importance in the consumer basket.

• Inflation Targeting:

• Monetary policy managed by the South African Reserve Bank to keep inflation within a 3% to 6% range

• Headline Inflation:

• Unadjusted consumer price index (CPI) tracking the urban household shopping basket.

• Core Inflation:

• CPI excluding volatile items (fresh food, mortgage rates, VAT, and assessment rates).

• Administered Prices:

• Prices controlled directly by government or appointed authorities.

• Hyperinflation:

• Extreme price increases exceeding 50% that destroy currency confidence and cause a return to barter.

• Stagflation:

• Economic condition combining low growth, high unemployment, and high in

lation.

• CPI (Consumer Price Index):

• Measures the cost of living for consumer goods and services, including VAT and interest rates.

• PPI (Producer Price Index):

• Measures production costs for domestically produced goods, including capital and intermediate goods while excluding VAT and interest.

• Implicit GDP Deflator:

• Economy-wide inflation measure calculated as the ratio of current-price GDP to constant-price GDP multiplied by 100.