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It would mean a fundamental shift in the way that companies do business in the richer world. In this Future Perspective, we examine the arguments and outline the ways in which businesses need to change their thinking if they are to succeed in a low-growth world.
1 If inflation is caused by unsustainable economic growth then the boom may be followed by a recession. 2  To reduce inflation and keep inflation withinthe target, the B of E will have to increase interest rates; this causes problems because AD will fall causing lower growth. To reduce inflation and keep inflation withinthe target, the B of E will have to increase interest rates; this causes problems because AD will fall causing lower growth. 2  Higher rates of inflation are disliked by business because it makes it more difficult to predict future costs. 3  Therefore investment will be lower.