When inflation is high, who benefits?

Consequences of inflation: winners and losers of inflation

Loser of inflation

The creditors and the recipients of fixed incomes are disadvantaged, as their incomes are either not adjusted to the inflation rate at all or only after a considerable delay.


Even if they were not mentioned in the economic consequences of inflation discussed, one should not forget the consumers. Because of the price increases, they are among the losers in inflation. The amount of the loss depends on the personal shopping cart and the amount of income. Because if inflation mainly affects basic consumer goods (e.g. food, etc.), which they cannot substitute for other cheaper goods, they lose a lot.


Companies are both winners and losers, depending on the consequences of inflation considered. An important price function is the statement as to whether there is a shortage in a market. A price increase indicates a shortage and the companies are expanding their production. I.e. they invest. In the end, however, there is no demand for these investments.

Ultimately, inflation unsettles the economy through the loss of price functions. In the medium term, it refrains from making any further investments. An economic situation in which prices rise and economic output remains constant is known as stagflation. In Germany this could be observed at times in the 1970s.


Because of the relationships described, employees are among the losers. However, one must once again point out that this depends on the bargaining power of the trade unions and the situation on the labor market. If the economy is positive and the unions can prevail, the wage agreements already anticipate the anticipated inflation. In that case, the employees would then not have any real wage losses in the specific case.


Savers, especially small savers, are definitely the losers of inflation. We explained this above. However, one must also not forget to look at the effects on the future. Not only do you save on your savings account, etc., you also often invest in (private) retirement provision. The financial institutions that manage these savings have mostly invested the "borrowed" assets in government bonds, etc.

High inflation therefore puts private old-age provision at great risk. This is of particular relevance for freelancers such as doctors and their professional pension funds.

Retirees and transfer recipients

Once again briefly listed: Inflation is disadvantageous for pensioners and generally all transfer recipients. Because the benefits are only adjusted to the inflation with a delay.

Central banks:

They are among the losers in inflation. However, from none of the points already described. The main reason for mentioning is that inflation ruins a central bank's reputation. As a rule, all central banks pursue the goal of price level stability. If you have also bought a lot of government bonds, you are also a big believer and therefore also affected by inflation.

Middle class

In conclusion, one can say that the middle class is the biggest loser. It suffers most from the manifold consequences of inflation. Because it is not prepared for the price increases. Inflation weakens purchasing power and reduces savings, which are usually low-interest.


  • The consequences of inflation result primarily from the redistributive effects of inflation
  • There are winners and losers
  • The biggest loser is the middle class: less purchasing power and loss of wealth
  • For an impact assessment one should look at: income, assets, debts, employment

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