The word escalation has several meanings in the business world.
Two have to do with finance, and one has to do with general
business terminology. Escalation in Finance In finance,
escalation means a provision that allows the increase of costs
to be passed on in one way or another. This can be applied to
various situations, with the context changing as applicable. One
example is a clause that can be found in some employment
contracts. This is called an escalation clause. In an escalation
clause, provisions are made so that the employee will receive a
payment increase in accordance to inflation increases on a
yearly basis. The details may vary depending on the specific
nature of the employment contract. In this sense, however, the
cost of inflation is being passed on to the employer. The
escalation clause offers protection for the employee, covering
circumstances that are beyond his control. Another way by which
escalation is used in finance is in the term escalation rate.
This rate is defined as how fast the p