INFLATION AND WEALTH INEQUALITY IN SOCIETY

How newly created money spreads through an economy unevenly, favoring early recipients. Those who receive new money first—such as financial institutions and asset holders—benefit by spending it before prices rise, while late recipients, like wage earners and retirees, suffer because their purchasing power has already been eroded by inflation. The sources detail how this mechanism increases wealth inequality and highlights modern examples, including quantitative easing (QE) and government stimulus programs. Furthermore, the texts explain how inflation benefits large corporations with price-setting power and governments by reducing the real value of their outstanding debt.