How to determine the level of inflation

Inflation in economic systems, manifests itself by raising the General level of prices for various products. Therefore, in the period of inflation for the same money after a certain time you can buy less goods or services than before. So the money lose part of its real value.

Instruction

To measure inflation are subject to special economic-statistical indicators – indices (rate of) growth and price increases. The price index represents the relative change in the average price level for the conditional period. In turn, the average level of prices is called a weighted average of all prices for products in a certain set, defined consumer basket.

The level of inflation is a measure of the average level of price change of production with respect to the base period and is used as a magnitude of inflation, and is expressed in percentage for the year. As a rule, when calculating price index of prices in the base period using the following formula:SP = TSC / TSBG x 100%, gdeep index of the prices of the current period,
TSC – price value of the current period,
TSBG – expression prices of the base year.

Measurement of inflation using the growth rate of prices can be determined by the formula:TCP = (TSC-BSC) / BSC x 100% where TCP is the growth rate of prices for the current period,
TSC – the value of the prices of the current period,
Tspp – the value for the previous period.

There are different types of indexes price. Chain indices determine the ratio of the price of each following period from the previous one. Underlying or long-term indices define the size ratio of the prices of some period of defined time series with the basic period. It is possible to obtain the value of the underlying index through multiplication of values of chain indexes.

A rather important place among the price index is the deflator of GDP or GNP (gross domestic product or gross national product) is a price index in which the consumer basket includes absolutely all final goods or services. This index compares the growth of the General level of prices on the basis of a basket of national product. He Escalada according to the following formula:DWP = STP / SBP x 100%, where DWP – the value of the GDP deflator of the current period,
STP – figure cost of a basket of GDP in prices of the current period,
SBP – value cost of a basket of GDP in prices of the base year.

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