The effects of inflation can be seen both on the supply side and on the demand side.
The effects on the company
In general, profits rise first, since mostly the costs of wages and salaries as well as the costs of goods and services obtained from public institutions water, energy, e.g. B. DB Cargo's freight costs are increased with a delay.
Rising prices, coupled with increased revenue, prompt companies to invest and produce more. But that only applies as long as the capacity expansion brings more income. If the cost prices rise faster than the sales prices or if the demand even drops, the companies will make capacity restrictions and this usually means redundancies of workers.
The effects on private employee households
Für die Arbeitnehmer bedeutet die Inflation in erster Linie ein Sinken der Purchasing power, ein Sinken ihres realen Einkommens. Den Verlust werden sie durch Lohn- und Gehaltsforderungen wieder versuchen auszugleichen. Das geschieht normalerweise mit einer zeitlichen Verzögerung, da die Tarifverträge meist über feste Laufzeiten abgeschlossen werden, während die Unternehmen bei Preiserhöhungen keine bestimmten Fristen abzuwarten brauchen.
Another disadvantage is that the savings assets also lose value if the interest granted does not cover the loss of purchasing power. A flight to real assets in order to avoid the deterioration in the value of money is typical of inflation. The permanent wage earners are particularly disadvantaged in terms of inflation, as their income generally does not rise to the same extent as the value of money falls. The position of the debtor is more favorable than that of the creditor, since he repays his debts with "worse" money.