Impact of Inflation, The gainers and losers from inflation

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Please see below Impact of Inflation, The gainers and losers from inflation



As discussed previously in Inflation: Definition, Components, and Methods for Measuring the level of general inflation can be interpreted as an increase in the price level of goods and services in general and continuously for a certain time.

Impact of Community Economic Activity Against Inflation
Positive Impact :
1. Circulation / turnover of goods more quickly.
2.Produksi goods increases, due to increased business profits.
3. Increased employment opportunities, due to additional investment.
4.Pendapatan nominal increases, but the real reduced, because a small increase in income.

Negative Impact :
1. Prices of goods and services rose.
2. Values ​​and beliefs of the money will go down or reduced.
3. Raises speculation measures.
4. Many development projects stalled or abandoned.
5. Reduced public awareness of saving money.

The parties to Obtain Benefits and Suffering
Occurrence of Losses Due to Inflation

The parties to the benefit
a. The businessman, who at the time before inflation, already has a stock / inventory of goods ready for sale in bulk.
b. The traders, who use the opportunity to play the inflation of goods prices. Methods used is to raise prices, because they want to earn income / profit.
c. The speculators, namely people or entities who hold speculation, hoarding of goods by as much as possible before the inflation and sell it back on when inflation occurs, so that the increase of their prices are very favorable.
d. The borrower, because the loan had been taken before the price of goods rises, so its real value after inflation is higher than the case, but the borrower pays back fixed in accordance with the agreements made prior to inflation. For example, the mortgage credit decision before the inflation that resulted BTN price of building materials and home mortgages rose BTN, while the number of installments to be paid to participate BTN remain elevated.

Affected parties:
a. The consumer, having to pay higher prices, so that goods obtained less when compared to the prior occurrence of inflation.
b. Those who earn it, because with a steady income, rising prices of goods and services, resulting in the amount of goods and services that can be purchased a little more, so that real income / markedly reduced, whereas the increase in income or income in the event of inflation can hardly be expected .
c. The contractor or contractors, because they have to spend an additional fee to cover expenses resulting from inflation and result in reduced profits generated from the project.
d. The lenders / creditors, because the real value of loans that have been given a smaller as a result of inflation. For example, before inflation, loan Rp 500,000.00 = 25 grams of gold, after inflation = 20 grams of gold.
e. Savers, because when inflation interest earned from savings felt smaller when compared with the price increase that occurred. In addition, due to rising prices of goods and services, value for money savings will be lower / down, when compared with the prior inflation.