Who is Hurt and Who is Helped by Unanticipated Inflation Lenders Money they are paid back is worth less. People on Fixed Incomes Their income can buy less each year; their purchasing power declines. 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 Employees Money they are paid is worth less Producers Costs of N, H, C, E ↑ which ↓ profits Consumers Pay more for goods and services Employers Money they pay is worth less.

Who is Hurt and Who is Helped by Unanticipated Inflation In summary- If the amount of $ is fixed: In summary- If the amount of $ is fixed: People who have money coming in Lenders, Employees, Producers, People on Fixed Incomes, Consumers People who have money going out Borrowers, Employers!

Who is Hurt and Who is Helped by Unanticipated Inflation In summary- If the amount of $ is variable: In summary- If the amount of $ is variable: People who have money coming in Lenders, Employees, Producers, Workers with good COLA’s People who have money going out Borrowers, Employers