[howeyc]

I sell hammers for a 25% margin.

I buy hammers for $10, sell for $12.50. My supplier increases prices with inflation to $11. To keep my 25% markup, I sell for $13.75.

I sell 1 million hammers per year.

My profit went from 2.5 million to 2.75 million, an increase of 10%.

I doubt think the IMF is making this assumption, but a lot of people would see my hammer business as extracting all inflation to myself, as my profits rose 10%. However, selling 4 hammers nets me enough profit to buy one, both years. I'm not better off. I'm the same.