The term ’inflation’ is used in many senses and it is difficult to give a generally accepted, precise and scientific definition of the term. Popularly inflation refers to a rise in price-level or fall in the value of money. Kemmerer states that,” inflation is too much currency in relation to the physical volume of business being done”.
Coulburn defines inflation as, “too much money chasing too few goods”. The implication in these definitions is that prices rise due to an increase in the volume of money as compared to the supply of goods. They seek to establish cause and effect relationship between supply of money and the price-level.