Inflation is caused by printing money faster than producing goods and services, which leads to rising prices. The quantity theory of money states that the money supply determines the price level, assuming velocity of money and real GDP are constant. Inflation redistributes wealth from lenders to borrowers and from the public to the government through tax bracket creep. It also creates uncertainty and illusion of real income. Costs of inflation include uncertainty, illusion of income, redistribution, tax bracket creep, and unexpected inflation hurting lenders or borrowers depending on whether actual inflation is lower or higher than expected.