Impacts and benefits of inflation on the economy
According to Gregory Mankiw, inflation causes five losses:
(1) Reducing the purchasing power of money. So inflation means an invisible tax that takes away a portion of the income of citizens and cash holders.
(2) Forcing businesses to change tariffs regularly. This change causes cost to the business.
(3) Cause relative price changes while producers and consumers do not adapt. The market economy is based on relative prices to effectively distribute resources. Inflation makes the distribution of resources inefficient, when viewed from the perspective of microeconomics.
(4) Reducing tax revenue due to many provisions of the tax law does not take into account the impact of inflation. Inflation can change an individual's tax liability that the lawmaker does not measure up to.
(5) Cause inconvenience to life in a world where market prices frequently change. Money is the measure in which we calculate the cost of economic transactions. Inflation makes this measure elastic, upsetting personal and corporate finance.
---------------
Stay in (1). We have seen how the effects of inflation on the economy and finances of citizens (including wages at work, profits of businesses). That is also why I think that inflation has caused a reaction in the psychology of people on the financial issue. Many families are in great conflict because of this. Unfortunately, inflation is constantly increasing and spreading in many countries around the world. That includes the country in which I live.