Business Strategies in Inflationary Economies

1. The study of growth policies of firms has raised, in the last ten years, an increasing interest among economists (see for instance, among others, [2], [4], [5], [7]), but the analysis has generally been developed in the context of a non-inflationary economy. The purpose of this paper is to explore some aspects of the problem when the firm belongs to an inflationary economy. For the sake of simplicity, it is assumed throughout that the firm knows the future perfectly' and that the inflation rate is certain, constant and everlasting from the origin of time through infinity. Such an extreme hypothesis about inflation is justified by the fact that more realistic models, though implying longer mathematical developments, lead to policies which are " approximately" the same during the inflation period. In our model there are three reasons why inflation makes a difference to growth strategies