Principles of Macroeconomics / Unit 6 MAC 0516 short lesson, about 20 seconds
Who Gains and Who Loses
Captions available
The idea
Unexpected inflation moves purchasing power around. Holders of cash lose, fixed-rate borrowers gain, lenders lose, and anyone on a payment fixed in money terms loses.
In practice
A pension fixed in dollars buys less every year that prices rise.
Where people slip
Wages usually catch up, but with a lag, and the catching up has to be argued for rather than happening on its own.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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