What are the different types of inflation?

There are several different types of inflation that can occur in an economy. These include:

1. Demand-pull inflation: This type of inflation occurs when there is an increase in aggregate demand in the economy, leading to an increase in prices. It typically happens when there is strong consumer spending, increased government spending, or expansionary monetary policy.

2. Cost-push inflation: Cost-push inflation occurs when there is an increase in production costs, such as wages or raw material prices, which leads to an increase in prices. This can happen due to factors like higher energy costs, increased labor costs, or supply chain disruptions.

3. Built-in inflation: Built-in inflation is also known as wage-price spiral. It occurs when workers and businesses expect prices to rise in the future, leading to higher wages and increased production costs. This, in turn, leads to higher prices, creating a cycle of inflation.

4. Imported inflation: Imported inflation happens when the prices of imported goods and services increase. This can occur due to factors like changes in exchange rates, tariffs, or global supply chain disruptions. It affects countries that heavily rely on imports.

5. Hyperinflation: Hyperinflation is an extreme form of inflation where prices rise rapidly and uncontrollably. It typically occurs due to severe economic instability, such as war, political instability, or excessive money printing. Hyperinflation can have devastating effects on an economy, leading to a loss of confidence in the currency and a breakdown of the monetary system.

It is important to note that these types of inflation can often occur simultaneously or overlap, making it challenging for policymakers to address and control inflation effectively.