Who is Hurt and Who is Helped by
Who is Hurt and Who is Helped by Unanticipated Inflation Hurt • Lenders • Money they are paid back is worth less. • People on Fixed Incomes • Their income can buy less each year; their purchasing power declines. Helped • Borrowers • Money they pay is worth less. • Workers with good COLA’s • If inflation goes up by 3% their pay will go up automatically by more than that.
Who is Hurt and Who is Helped by Unanticipated Inflation Hurt • Employees • Money they are paid is worth less • Producers • Costs of N, H, C, E ↑ which ↓ profits • Consumers • Pay more for goods and services Helped • Employers • Money they pay is worth less.
Who is Hurt and Who is Helped by Unanticipated Inflation Hurt Helped In summary- If the amount of $ is fixed: People who have money coming in People who have money going out Lenders, Employees, Producers, People on Fixed Incomes, Consumers Borrowers, Employers!
Who is Hurt and Who is Helped by Unanticipated Inflation Hurt Helped In summary- If the amount of $ is variable: People who have money going out People who have money coming in Borrowers, Employers Lenders, Employees, Producers, Workers with good COLA’s
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