Significant inflation leads to increased interest rates and this makes it more expensive to take on new debt.
Or, if a country has high inflation and does not increase interest rates, this can lead to money flowing out of the country.
Inflation can also affect consumer spending, and therefore, selling of future products. Whether the effect is positive or negative could depend on how much consumer spending is debt-financed.
if you are the one owing money, yes; if you are the one who is supposed to receive money, it is not so great. i would assume the ones worrying about this are the ones who are supposed to be receiving money? i am also an economics idiot
I’m an economics idiot. But doesn’t general inflation reduce the burden of debt?
Significant inflation leads to increased interest rates and this makes it more expensive to take on new debt.
Or, if a country has high inflation and does not increase interest rates, this can lead to money flowing out of the country.
Inflation can also affect consumer spending, and therefore, selling of future products. Whether the effect is positive or negative could depend on how much consumer spending is debt-financed.
If your wages do not rise at the same rate as inflation, your debt burden does not shrink.
if you are the one owing money, yes; if you are the one who is supposed to receive money, it is not so great. i would assume the ones worrying about this are the ones who are supposed to be receiving money? i am also an economics idiot