PRESENTATION ON

COMPARATIVE STUDY ON PRICE

LEVEL OF JAPAN AND INDIA

PRESENTED BY: MANISHA DAS

DIPANKAR SAHA
SUNITA DEB
BIDISHA SAHA
 Price Level

Price level is the average of current prices across the

entire spectrum of goods and services produced in an
economy. In more general terms, price level refers to
the price or cost of a good, service, or security in the
economy.
In economics, price levels are a key indicator and are
closely watched by economists. They play an
important role in the purchasing power of consumers
as well as the sale of goods and services. It also plays
an important part in the supply demand chain.
 Deflation

Deflation, in economics, occurs when the overall

price level of good and services decreases such that
the inflation rate turns negative.
 CAUSES OF DEFLATION

Deflation is most often caused by reduction in the

supply of money or credit.
Decrease in personal, government or investment
spending can also result in deflation.
 EFFECTS OF DEFLATION

Decreasing nominal prices for goods & services.

Increasing buying power of cash money.
Decreased investment.
Benefits recipient of fixed income.
 INFLATION

According to Webster’s “An increase in the amount

of currency in circulation, resulting in a relatively
sharp and sudden fall in its value and sudden fall in
its value and rise in price: it may be caused by an
increase in expenditures as when the supply of good
fails to meet the demand.
According to prof. Samuelsson “inflation occurs
when general level of prices &cost are rising”
 CAUSES OF INFLATION

Demand pull inflation

Cost push inflation

Built in inflation
 EFFECT OF INFLATION

Decrease in the purchasing power

Chang the allocation of income
Stock
Interest rate
 GDP
Nominal GDP - Nominal gross domestic product
is gross domestic product (GDP) evaluated at current
market prices.
Real GDP- Real gross domestic product (Real
GDP) is an inflation adjusted measure that reflects
the value of all goods and services produced by an
economy in a given year (expressed in base-year
prices) and is often referred to as constant price
GDP, inflation-corrected GDP, or constant dollar
GDP.
 WHOLESALE PRICE INDEX

A wholesale price index (WPI) is an index that

measures and tracks the changes in the price of goods
in the stages before the retail level.
This refers to goods that are sold in bulk and traded
between entities or businesses (instead of between
consumers). Usually expressed as a ratio or percentage,
the WPI shows the included goods' average price
change. it is often seen as one indicator of a country's
level of inflation.
Calculation:- WPI= (Current Price / Base Period Price)
× 100.
 CONSUMER PRICE INDEX

 The Consumer Price Index (CPI) is a measure that examines

the weighted average of prices of a basket of consumer goods
and services, such as transportation, food, and medical care.
 It is calculated by taking price changes for each item in the
predetermined basket of goods and averaging them. Changes
in the CPI are used to assess price changes associated with the
cost of living. The CPI is one of the most frequently used
statistics for identifying periods of inflation or deflation.
 Calculation of CPI:-
CPI = Cost of Market Basket in Base Year/ Cost of

Market Basket in Given Year×100

 WHICH IS BETTER CPI,WPI,GDP
DEFLATOR?

The GDP Deflator covers the entire range of goods and services
produced in the economy — as against the limited commodity
baskets for the wholesale or consumer price indices — it is
seen as a more comprehensive measure of inflation.
 Both the WPI and CPI capture changes in prices at varying
stages of the economic cycle. But since only goods and services
directly consumed by households — food products, clothing,
petrol, health, education and recreation — are considered, the
CPI does not tell us what is happening to prices of cement,
steel or polyester yarn. However, GDP deflator is available only
on a quarterly basis along with GDP estimates, whereas CPI
and WPI data are released every month.
 CONCLUSION

 According to the Japan Center for Economic Research as the

urban population and tech industry drive growth in the South
Asian country, India will surpass Japan in terms of gross
domestic product in 2029 to become the world's third-largest
economy. India's economy, currently about half the size of
Japan's, is destined to reach roughly $10 trillion by 2035,
according to JCER's latest annual Medium-Term Forecast on
Asian Economies. Japan's GDP was estimated at $4.9 trillion by
the World Bank in 2018.
The rise of India's startups will fuel the nation's economy. Indian
cities host nearly 10% of 115 unlisted startups worldwide that
offer promising growth prospects but have valuations below $1
billion.