Features of Inflation

Following are the main features of inflation:

(i) Inflation is always accompanied by a rise in the price level. It is a process of uninterrupted increase in prices.

(ii) Inflation is a monetary phenomenon and it is generally caused by excessive money supply.

(iii) Inflation is essentially an economic phenomenon as it originates in the economic system and is the result of action and interaction of economic forces.


(iv) Inflation is a dynamic process as observed over the long period.

(v) A cyclical movement of prices is not inflation.

(vi) Pure inflation starts after full employment.

(vii) Inflation may be demand-pull or cost-push.


(viii) Excess demand in relation to the supply of everything is the essence of inflation.