deflation

(redirected from Negative Inflation)
Also found in: Dictionary, Thesaurus, Medical, Legal, Encyclopedia.

Deflation

Decline in the prices of goods and services. Antithesis of inflation.

Deflation

A situation in which a currency gains value, often resulting from a decrease in prices. Many economists believe that deflation is the result a fall in demand for goods and services, which causes producers to reduce prices. This reduces their profits and causes a reduction in investment, which contributes to a further drop in demand. Because of this deflationary spiral, deflation is often associated with recessions and depressions and has been known to cause unemployment. It is also called negative inflation. See also: Lost Decade, Inflation.

deflation

A reduction in consumer or wholesale prices. The term generally applies to more than just a temporary decline. Compare inflation. See also disinflation.

Deflation.

Deflation, the opposite of inflation, is a gradual drop in the cost of goods and services, usually caused by a surplus of goods and a shortage of cash.

Although deflation seems to increase your buying power in its early stages, it is generally considered a negative economic trend. That's because it is typically accompanied by rising unemployment, falling production, and limited investment.

deflation

a fall in the rate of growth of the general level of prices in an economy, or an absolute reduction in the general level of prices (see PRICE INDEX). The authorities may seek to deflate the economy in order to combat INFLATION and eliminate a BALANCE OF PAYMENTS deficit by using restrictive monetary and fiscal measures, i.e. increasing interest rates and taxes to cut spending. See ECONOMIC POLICY, MONETARY POLICY, FISCAL POLICY, PRICES AND INCOMES POLICY.

deflation

a reduction in the level of NATIONAL INCOME and output usually accompanied by a fall in the general price level (DISINFLATION).

A deflation is often deliberately brought about by the authorities in order to reduce INFLATION and to improve the BALANCE OF PAYMENTS by reducing import demand. Instruments of deflationary policy include fiscal measures (e.g. tax increases) and monetary measures (e.g. high interest rates). See MONETARY POLICY, FISCAL POLICY.

References in periodicals archive ?
In addition, similar measures are presented for Ireland--the economy, in which the recent financial crisis led to the most negative inflation among euro zone economies.
More specifically, Gavin and Mandal report that, since 1994, policymakers were typically facing negative inflation forecast errors (that is, actual minus forecast) and positive output and employment errors.
Remember that the negative inflation rate merely means that spending power is increasing overall instead of decreasing.
Margins should benefit from higher interest rates and a reversal of the effect of negative inflation on UF-indexed assets and liabilities, and asset quality pressures are already easing during the first part of the year.
The firm reported a higher quarterly profit but missed expectations as negative inflation weighed on financing income.
He added: "I wouldn't be surprised if we have another month or two of negative inflation given the very substantial move in oil prices and the changes in utility prices.
Chief UK European economist at IHS Global Insight, Howard Archer was reported by the BBC as saying that negative inflation "proved both marginal and fleeting".
1% by 2017, adding that there would be low negative inflation in the months ahead before prices began to rise in late 2015, with 1.
The State Statistical Office registered a negative inflation in the first month of 2015 as well.
Analysts at Moody's argue that while the big fall in the price of oil since the summer should, in theory, boost economic output by cutting costs for businesses and consumers, in the euro area, the fall in oil prices takes place in an unfavourable economic climate, with high unemployment, low or negative inflation and resurgent political uncertainty in some countries.
The Eurozone slipped into negative inflation in December 2014 (-0.
The expectation is also that both the UK and the US will experience negative inflation for at least a portion of 2015.