Glossary · Macro · Inflation

Redistribution from unexpected inflation

Inflation that nobody planned for moves wealth from lenders to borrowers, because loans are repaid in money that buys less, and from people on fixed incomes to everyone else. Expected inflation gets priced into interest rates and wages, so it redistributes much less.

Also called: unexpected inflation, borrowers and savers

Taught in: Costs of Inflation & Deflation

Related terms

InflationReal interest rateFisher equation

More from inflation

Consumer price index (CPI)Cost-push inflationDeflationDemand-pull inflationHeadline vs core inflationHyperinflationLaspeyres price index

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