Consequences of high inflation by

Households

robertanikolova08 — 2025-09-25 01:12:59 UTC

Wealth decreases, real income decreases, lower consumption level for sufficient necessities, and higher living costs. Higher consumption levels of products as they are predicting higher future prices as a consequence of the constantly growing inflation. They exchange pesos with dollars as they need to have the safety from a more stable currency

Firms

robertanikolova08 — 2025-09-25 01:13:08 UTC

Gradual revenue decrease, no incentive for investment. The inflation doesnt reasure stable revenue, pushing them away from starting a new business as there is no government support and they can not cover the start up costs. No government support, higher production cost, Pl increase, output decrease, fire labor as they dont have the resources to pay the wages and to follow the laws.

Government

robertanikolova08 — 2025-09-25 01:13:19 UTC

The government is politically unpopular. It affects the possibility of improving the social welfare. They do not have the resources to subsidize businesses and to support households. They can also not decrease the unemployment level and the infrastructure as they are in constant debt to other countries, and they don't receive enough tax revenue.

Labor

robertanikolova08 — 2025-09-25 01:20:01 UTC

Real wages decrease, a higher unemployment rate, and no will to invest, as you have high uncertainty. The unemployment rate is way higher than the natural rate.

Also, the costs of production, including raw materials, labor and changing price tags become a higher burden.

sissipeng8_1 — 2025-10-06 07:19:55 UTC