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“Inflation that is higher than expected benefits debtors. Inflation that is lower than expected benefits creditors.”(pg 192 Macroeconomics) In order to thoroughly understand why this specific concept of inflation is true, you must first analyze the origin of inflation as well as the effects that it causes on the economy. Inflation was first noticed after the adoption of capitalism. When compared to the benefits of capitalism, it is not a huge concern. Since there is no longer a gold standard backing up the economy’s currency, it is very unlikely that the currency created will ever be exactly right for the economy. Inside of this, money that is taken out of circulation one way or another is a factor in why inflation exists. Inflation can loosely be thought of as a tax on that