How would distribution of wealth change if the United States were to enter a period of inflation? A study from the December issue of the Journal of Political Economy finds that even mild inflation can lead to substantial redistribution of nominal assets from lenders to borrowers, specifically, the transfer of wealth from older, wealthier households to younger, middle-class households.

The Federal Reserve, under first-year Chairman Ben Bernanke, appears close to achieving the tricky maneuver of steering the U.S. economy to a slowdown that will keep inflation under control.