Inflation

Inflation's redistribution of income and wealth tends to be at the expense of:
·lenders of money, who find they are repaid in money that has reduced purchasing power.
·Those on fixed nominal incomes where the purchasing power of their incomes will diminish with time unless they are fully indexed.
·Holders of assets held as cash, which do not increase in value as well as real assets. Eg. Savings deposits.
·Those not organised to protect their real income because they lack the market power.
If inflation is anticipated, then the effects will be reduced as people may plan for it.
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