Inflation

Why is unexpected inflation a societal problem?

Inflation is rising prices of goods and services and the decrease of money's purchasing power. When inflation is unexpected, it cannot be accounted for when people make decisions on how to deal with their money. Unexpected bouts of inflation is especially bad for lenders who offer fixed interest rates on loans because the money they receive back is not worth as much as it was when they initially offered the loan. Hyperinflation also causes many societal issues. Wheelan gave an example that during hyperinflation, people spend their paychecks right away because even in a matter of a day that money is no longer able to buy as much.