activities rather than productive purposes. . Effects on Distribution i) Debtors and Creditors: During inflation, debtors are the gainers while the creditors are losers. The reason is that the debtors had borrowed when the purchasing power of money was high and now repay the loans when the purchasing power of money is low due to rising prices.
ii) Fixed-income Groups: The fixed income groups are the worst hit during inflation because their incomes being fixed do not bear any relationship with the rising cost of living. Examples are wage, salary, pension, interest, rent etc. iii) Entrepreneurs: Inflation is the boon to the entrepreneurs whether they are manufacturers, traders, merchants - - Monetary Economics