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  • assassin_aragorn@lemmy.world
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    10 months ago

    Doesn’t that mean that deflation is favorable to the rich however, and inflation is favorable for the working class?

    Deflation makes what we already have more valuable, so people who have the most would see their net worth go up the most. In contrast however, inflation means the people hoarding wealth would see their net worth go down. The purchasing power for the wealthy only gets higher in deflation.

    This would suggest that inflation is actually to the benefit of consumers when it’s kept within check. The money they earn is more valuable relative to their net worth. Or rather, they don’t have as much of a loss to their assets.