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 ...

The icy blast of unfresh air!

As the western world is gripped by the ravages of double dip recessions, western governments look to the East with envy at the economic growth rates being achieved.  China's GDP in the first quarter of 2012 was 10,799.5 billion yuan, a year-on-year increase of 8.1%. From 1978 to 2010, average annual GDP growth rates in China were 9.8%, the highest in the world during the period. After more than 30 years of development, China can be called a modern economic miracle. What ...

Economic contagion threatens global business

The Eurozone economy's growth almost ground to a halt in the third quarter of 2011 with just a 0.2% rise, reinforcing expectations that the region could slip into a 'deep and prolonged recession' next year. There is much debate in global financial and investment markets as to whether a European economic recession will pull US and Asian economies down in its wake. The European Union said last week that the Eurozone is expected to grow just 0.5 per cent in ...