Inflation has been variously defined as a persistent rise in the general price level. Inflation is not measured by increase in the price of one or two household commodity but a general increase in the price level of the economy (Noko, 2011). Inflation has become a household word in Nigeria. It is no longer strange to student or a new jargon to petty trader in the market. Hardly any Nigeria citizens are affected by inflation. Uncontrolled can dislocate the economy and cause social upheaval.

            Inflation in economics is defined as a condition at which supply persistently fails to keep pace with the expansion of demand. It is a state of disequilibrium where too much money is chasing too few goods (Okoro, 2009) Aekley (1961) has said that inflation is a persistent and appreciable rise in the general level or average of prices”. Aekley viewed it as a state of disequilibrium that needs a dynamic analysis rather than static analysis. In the word of Varsh (2005), inflation is a sustained rise in the general level of prices brought about by high rate of expansion in the aggregate money supply. According Jean Bodin crude quantity theory of money, he argue that if money increase by x% there inflation will increase by x%.
This was further echoed by Professor Iruing Fisher, that what cause inflation in an economy is not only money supply but also velocity of circulation. He uses his equation of exchange (MU = PQ) to explain this concept clearly. An increase in money income without any corresponding increase in productivity, resulting in increase of the aggregate demand for goods and services which cannot be met at the current level by total available supply of goods and services in the economy, this will facilitate the dominance of inflation in such economy (Noko, 2011).
            It is possible to have fluctuation in prices of certain commodities, like agricultural commodities, because of shortfall in supply due to seasonal factors. This is not inflation, one general way by which people notice inflation is that once triggered off, the price increase tends to be general, affecting practically all prices, and it is continuous. Inflation is a worldwide phenomenon, the most serious in history being the hyper – inflation of Germany in the 1939s. The resultant effect was the general loss of confidence in the German money and one of the worst evils of inflation, as we shall shortly, is that it deprives money of it services as a store of value. In the midst of the world wars and immediately after, a number of world economies suffered severe inflation. Hyperinflation in which the astronomical rise in prices makes money worthless to hold was experienced in Germany in 1923, in Hungary in 1947 and China in 1959, in which it was lunatic of a person to hold money for the precautionary and speculative motives.
Varsh (2005) has noted that the climax of hyper inflation is reached when the flight from currency becomes fantastically high causing the velocity of money in circulation to move towards infinity. A number of measures are adopted by the monetary authority in controlling conservative and sustainable monetary policy. Central bank had relied on intermediate targets like monetary aggregates, which most advanced countries gave up and adopted a frame work of monetary policy known as inflation targeting. This is on the premise that the main objectives of monetary policy is to attain and preserve a stable rate of inflation.
This been successful in advanced countries in maintaining price stability and requires in dependence of central banks from government control as first requirement, allowing the monetary authority to gear the monetary policy instrument towards the normal objectives. Secondly, the monetary authority should consider avoiding the targeting of any other variables (Vaish, 2005).
            In controlling inflation, direct measures, as well as fiscal and monetary surer may be used. Fiscal and monetary measures act as complements of anti – inflationary economic policy. Monetary policy is enforced by using the different monetary instruments aimed at reducing the supply of money for speculative activities and increasing the cost of obtaining funds from the banks for stock – pilling and hoarding of essential goods which are in short supply. Central bank uses a number of measures to control inflation to include direct, selective and indirect measures. Money market is a market established by the central bank to facilitate the mobilization of short – term credit and hence, serve as medium of the bank to control fluctuation in the prices of stock and achieve a sustainable economic growth as well (Noko, 2011).
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