Who benefits most from inflation?

There are several entities and types of consumers who benefit from increased inflation. These include:

• Those with Debts. As prices increase, those with large debts and repayment plans will find it easier to pay back those debts.

• Governments with High Debts. Similar to how inflation affects debt on an individual level, governments with a lot of debt also stand to benefit from rising prices.

• Owners of Land and Physical Assets. Because inflation increases prices, those who own a house or a car will benefit from those price increases. For example, if someone bought a home worth $150,000, they make money when inflation drives that price up to $250,000 twenty years later.

• Firms that Cut Real Wages. When inflation increases, real wages decrease. This means that most companies have to raise their wages so workers can still afford their expenses. However, firms that don't need to raise wages benefit from high inflation.