Measures to Control Inflation (in Hindi)

Lesson 3 of 5 • 22 upvotes • 9:15mins

Vikas Kumar Singh Tomar

Inflation is generally controlled by the Central Bank and/or the government. The main policy tools to control inflation include: Monetary policy – Setting interest rates. Higher interest rates reduce demand, leading to lower economic growth and lower inflation Control of money supply – Monetarists argue there is a close link between the money supply and inflation, therefore controlling money supply can control inflation. Supply-side policies – policies to increase competitiveness and efficiency of the economy, putting downward pressure on long-term costs. Fiscal policy – a higher rate of income tax could reduce spending and inflationary pressures. Wage controls. Trying to control wages could, in theory, help to reduce inflationary pressures. However, apart from the 1970s, rarely used.