Lot&#x27;s of reasons the most obvious is it does not impact trade or currency.  However, from a repayment standpoint the debt payments are generally taxable which reduces the effective interest rate dramatically.<p>Hypothetical example: Interest rates are 8%, inflation is 5% = 3% over inflation.  Now tax that 8% at 30% and your paying 5.6% - 5% inflation = 0.6% effective rate. (Assuming you don&#x27;t let interest compound tax free.)