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Economics
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Is there anyone who benefits from inflation? Explain

Sep 14th, 2015

Thank you for the opportunity to help you with your question!

Exporters get the benefit of it. Whenever inflation goes up, the importance of American currency goes down internationally and exporter take benefit of it in sales volume. 

I take the example of Pakistani currency as compared to American currency.
Let's say in current situation $1= 104 Pakistan Rupees

Let's say one American toy costs $1 to Pakistani people if they import it from America.
Let's say inflation is increased dramatically and now $1= 78 PKR. Now Pakistani people can purchase more footballs from America. This way, the demand of footballs shall increase and exporters of America shall sell products in high volume and they will get the benefit of inflation. 

Please let me know if you need any clarification. I'm always happy to answer your questions.
Sep 14th, 2015
I don't quite follow your example. If the inflation is in the US then, it makes US exports  more expensive abroad. If inflation is greater in Pakistan, they may not import as much if their currency also depreciates (meaning it takes more Rupies for the same dollar). In general, inflation hurts exporters of that country since their price is getting higher and can't compete with those of other countries?


Sep 16th, 2015

Need a better clarification of what you are meaning in your example?

Sep 16th, 2015

First of all we are not talking about inflation of other countries increases at the same time, we are assuming that the inflation of other countries is constant. 

Now see the example of toys. 1 USD= 1 toy= 104 Rupees
Similarly, if inflation of America goes up. we assumed 1 USD= 78 Rupees

Now. 1 USD= 78 Rupees= 1 toy. 

If pakistani people spend 104 rupees just like the past they can get 1.5 toys. 

2 toys in 156 rupees. but in past they got 2 toys for 208. 

As the price of toy is lower for them now, they will buy many toys and that's how demand of toys shall be increased and exporters shall get profitability from the high volume of sales. 

Sep 16th, 2015

On the other hand, borrowers also get the benefit of inflation according to the concept of TIME VALUE OF MONEY. Technically they give back the money that had more worth in past when he borrowed it. 

Similarly, stockholders also get the benefits. They can sell the same reserved stock in more price as the prices increased by increase in inflation. 

Sep 16th, 2015

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