Financial Education | Economic Stability and progressive inflationary effect

The inflationary effect in any economy, whether third world or underdeveloped, generates great uncertainty in the decisions of potential emerging investors at the time of investing within the national states.

This occurs due to the constant and progressive rise in the prices of goods and services, since inflation is generated, i.e. the percentage change in the general level of prices in a given period for a given good or service.

On the other hand, economic stability is a situation in which the entities do not show great variations in their main macroeconomic indexes. In order to study the economic stability of a commercial entity, it is necessary to investigate and analyze the behavior of the economic variables that directly affect it.

Remember that macroeconomics studies the growth and fluctuations of a country's economy from a broad perspective, that is, a perspective that does not go into too much detail about a particular sector or business.

In this sense, macroeconomics does not study the actions of particular companies or individuals, but the trend of these actions as a whole. These actions involve macroeconomic variables such as inflation, exchange rate, interest rate, among others.