Uwindz's Blog

Impact of Inflation, the Party gainers and losers due to Inflation

Posted on: Januari 5, 2011

As discussed earlier in Inflation: Definition, Components, Level Measurement and Methods that the overall inflation can be interpreted as an increase in the price level of goods and services in general and continuously for a certain time. Impact of Inflation on Economic Activity Society Positive Impact 1. Circulation / turnover of goods more quickly. 2.Produksi goods increases, due to increased business profits. 3. Increased employment opportunities, because there was additional investment. 4.Pendapatan nominal increases, but the real decrease, because a small increase in income. Negative Impact 1. Prices of goods and services rise. 2. Value and confidence in the money will go down or reduced. 3. Action raises speculation. 4. Many development projects stalled or abandoned. 5. Reduced public saving awareness. The parties to Obtain Benefits and Suffering Occurrence of Losses Due to Inflation The parties are benefited a. The businessman, who at the time before the inflation, already has a stock / supply of goods ready for sale in bulk. b. The traders, who by the occurrence of inflation using the opportunity to play the price of goods. The way used is to raise prices, because they want to get profit / profit. c. The speculators, that is, people or business entities who hold speculation, hoarding of goods by as much as possible before the occurrence of inflation, and sell it back on when inflation occurs, so that the price increase is very beneficial to them. d. The borrower, because the loan had been taken before the price of goods rises, so that its real value is higher than after inflation occurs, but the borrower to pay back fixed in accordance with the agreements made prior to the inflation. For example, the mortgage credit decision before inflation which BTN cause the price of building materials and home mortgage BTN rose, while the number of installments to be paid to the BTN still does not come raised. The parties to the disadvantaged: a. The consumer, because they have to pay more expensive, so that goods obtained less when compared to the prior occurrence of inflation. b. They fixed income, because with regular income, rising prices of goods and services, resulting in the amount of goods and services that can be purchased to be less, so that real income / real decrease, while the increase in earnings or revenue in times of inflation hardly be expected . c. The contractor or contractors, because they have to spend an additional fee to cover expenses resulting from inflation and result in reduced profits from the project. d. The lenders / creditors, because the real value of loans granted becomes smaller as a result of inflation. For example, before inflation, borrowing USD 500,000.00 = 25 grams of gold, after inflation = 20 grams of gold. e. Savers, because when inflation rates derived from the perceived savings is smaller when compared with the price increase that occurred. In addition, due to rising prices of goods and services, value for money savings will be lower / decreased, when compared with before inflation.

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