| > how does this affect the poor more than the wealthy? Because the $10 mil in stocks also appreciated by the roughly 7% average annual S&P 500 returns, meaning the rich person's wealth still increased 5% after 2% inflation. The $10,000 in a current account earned 0.5%, making the poor person 1.5% poorer after inflation. It's a textbook case of 'the rich getting richer, and the poor getting poorer'. The poor do not have the flexibility to allocate their capital to higher yield assets that allow them to 'escape' inflation. I am not advocating a fringe position. In fact, the first three papers I found investigating this issue came to the same conclusion: inflation actually increases poverty: [1] "Inflation and the Poor" https://www.jstor.org/stable/2673879?seq=1#page_scan_tab_con... [2] "Poverty, inflation and economic growth:
empirical evidence from Pakistan" https://mpra.ub.uni-muenchen.de/34290/1/MPRA_paper_34290.pdf [3] "Has Inflation Hurt the Poor? Regional Analysis in the Philippines" https://www.adb.org/sites/default/files/publication/28370/wp... |