Business: How Inflation Helps--and Hurts--the Poor

THE burden of inflation, President Nixon has often said, falls heavily upon the poor, "who are largely defenseless" against price increases on the necessities of life. That view is seldom questioned by politicians, but a growing coterie of economists has lately come to regard it as a misleading oversimplification. Affluent America knows surprisingly little about precisely how inflation affects the poor. What information is available, though, suggests to some experts that inflation—or at least some of the conditions that contribute to it—actually helps many of the poor more than price boosts hurt them....