Who benefits from inflation and who gets hurt by inflation?
Inflation can benefit either the lender or the borrower, depending on the circumstances.
If wages increase with inflation, and if the borrower already owed money before the inflation occurred, the inflation benefits the borrower.
What does inflation affect the most?
Inflation affects them especially hard because the prices of things they buy go up while their income stays the same. In a way, inflation works as a hidden tax because the government borrows money from investors. It spends this valuable money and then gets to pay back its debt with cheaper dollars.
What age group is most affected by inflation?
50 to 64 year-olds still face the highest rate of inflation among the age groups, at 4.1pc – 24pc higher than the official rate.
Who gains in inflation?
One important redistribution of income and wealth that occurs during unanticipated inflation is the redistribution between debtors and creditors. a. Debtors gain from inflation because they repay creditors with dollars that are worth less in terms of purchasing power.