阅读理解
Before discussing the effects of inflation and deflation on the distribution of income, it will be useful to define these terms. By inflation we mean a time of generally rising prices for goods and factors of production, such as payments for work and money paid for the use of buildings or land. By deflation we mean a time when most prices and costs are falling. Neither in inflation nor in deflation do prices all move in the same direction or in exactly the same proportion. As a result of changes in relative prices and in total spending, the two processes of inflation and deflation cause clearly defined and typical changes in the distribution of income among economic classes.
Inflation which is not expected tends to favor debtors(f|(债务人) and profit receivers at the expense of creditors(债权人) and receivers of income which does not change. Suppose, for example, that you lend $1,000 to someone today and are paid back one year from now. If in the time between when you lend the money and when you are paid back, prices have doubled, then your debtor will be paying back only one-half as much real purchasing power as you gave him. Or consider an American who was earning a fixed rate of 6 percent yearly on a mortgage before World War II. This war caused a high rate of inflation in the United States. This person found that as a result of inflation, he was not even maintaining his position, with regard to the real purchasing power of the dollar.
In contrast, one who invests in real estate, in common stocks, or in goods makes a great money profit during times of unexpected inflation. During such times, the volume of business sales increases greatly, as do prices, between the time that businesspersons buy and sell their products. Fixed or overhead costs stay the same; other costs rise, but not so rapidly as prices. For all these reasons, profits increase — often faster than the cost of living.
In time of deflation, the situation is the opposite. Creditors and receivers of income which is fixed tend to gain at the expense of debtors and profit receivers. If prices fall between the time that a creditor lends money and is repaid, then he gets back more purchasing power than he lent. Between the time that a merchant buys and sells goods, he will have to take a loss. The schoolteacher who keeps his job and whose pay is not cut, however, finds that his real income has increased. Likewise, a hoarder, who earns no interest on the money she keeps hidden, finds that the real value of her wealth increases every day. If prices fall at the rate of 10 percent a year, she is being rewarded for her act against society at a 10 percent rate of interest in real terms, while the businessperson who gives someone a job may find that he cannot even get back his outlay, much less earn a profit.
Modern research suggests that the greatest redistribution of income resulting from inflation is from older people to younger people. This is because the dollars one saves at age 25 for the time when one can give up one''s work at age 70 often grow smaller in purchasing power.