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The Great Debate: Inflation, Deflation and the Implications for Financial Management



As the economy bounces between recession and recovery, financial executives have to make a bet between whether the economy, their industry and their business will experience rising prices going forward or whether they will have to grapple with the balance sheet and operational effects of deflation. They will have to choose wisely as this has the potential of being a bet-your-business risk. The decision is made all that more difficult by the simple fact that few senior managers have ever had to deal with either high inflation or deflation in their careers.

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