Deflation – cheaper must be better

Although inflation is often considered to be an economic concept, it is of great importance to all firms and, consequently, to business management students. Inflation is part of the macro environment, referred to as PEST or STEEPLE in the guide, and sitting under economics as an external constraint. Inflation is defined as “the rate of increase in prices for goods and services” – in other words the tendency for prices to rise in an economy. Inflation, therefore, reduces the value of ...