Types of Inflation:
The first type of inflation is known as demand-pull. It is also known as excess demand inflation. This type of inflation occurs when the total demand for services and goods in an economy is more that the available supply which leads to increases in prices of those goods and services. This is the most common type of inflation and is considered to be the most serious. Almost all other types of inflation occur in conjunction with demand-pull inflation.
The next type of inflation is cost-push inflation. In this type of inflation the costs of production increase for some reason or the other and it results in the increase in prices of finished goods and services. Usually increase in wages in excess of any gains in labor productivity leads to increased unit costs, which in turn leads to increase in prices.
The third type of inflation is pricing power inflation. This inflation is more commonly known as administered price inflation and it occurs when businesses decide to increase their prices in order to increase their profit margins. This type of inflation does not occur during a recession. It occurs when the economy is booming and sales are high.
The fourth and the last type of inflation is known as sectoral inflation and it occurs when any of the other three factors hits a basic industry and causes inflation in that particular industry. For example, if the oil industry raises its prices, all industries using oil will be hit by the increase and this forces them to increase their prices and as a result the inflation occurs throughout the economy because it started in one sector.
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Inflation is never good for the economy of a nation. It eats into the productivity and viability of the economy. Due to inflation, business decisions are covered with uncertainty and results in complications. This in turn affects the growth and productivity of the nation. 
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