Effect of inflation on different classes of  people

There are various types of people live in our society. Inflation effects are not the same for all people in society. One party may damage due to inflation and the other party may gainer at this time. The effects of inflation on the people in the society are given below.

  1. Effect the fixed income earning people:

The fixed earning people are highly damages at the time of inflation. Because The lifestyle cost is increased as the product’s price is increased.  As a result, the actual earning is reduced by fixed earning people. Because fixed earning people can buy fewer products at the time of inflation. Thus, the level of their lifestyle is reduced.

  1. Effect of the labor class:

The labor class is also affected by inflation. The wages of labor are increased not in the same manner as the price of products increased. Thus, the actual earning of them is reduced along with their lifestyles.

  1. Effect on loan sender and receiver:

The debtor becomes profit earner but the creditor needs to face damages.  The lender can repay their loan by selling a small portion of their goods. On the other hand, creditor faces a lot of losses. Because, they get back the loan but, they can’t buy the same amount of goods as before.

  1. Effect on farmers:

The farmers get advantages because of inflation. The production cost is not increased as the price increased but the price of agricultural goods is increased. Thus the seller can get more profit. But the landless farmer is highly affected at this time.

  1. Effects on the taxpayer and receiver:

The taxpayer gets advantages from inflation. Because they need to pay a fixed tax by selling less product than before. The actual value of government loans is reduced due to inflation.

  1. Effects on investors:

The investor who is investing in buying share can be benefitted during inflation. Besides, who invests in getting interested in debenture can be the loser at this time.  Thus, inflation created a mixed effect on its investors.

  1. Effects on producers:

The producers are benefited during inflation. Because they get more money by selling a fixed amount of goods. As a result, production, investment, and earning are increased during inflation.

  1. Effects on economic growth:

Economic growth is increased due to inflation. Because production and earning are increased at this time. Thus, inflation helps to increase economic growth.

  1. Effects on rich and poor class people:

The sufferings of the lower class people are more than the higher class people during inflation. The richer become richer and the lower becomes lower at this time. Thus, there exist income disparity during inflation in our society.

  1. Damages of social values :

To get more profit,   one class people involved in the black market, doing dishonesty in business, create an artificial shortage in the market during inflation. As a result, it is highly damaged social values of society.


Finally, inflation creates various adverse effects on society and there is a negative effect on society.

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