Reflation


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Related to Reflation: recession, stagflation

Reflation

Government monetary action that causes a reversal of deflation.

Reflation

The act of a government printing money or taking similar actions to combat deflation. Deflation occurs when a recession is so severe that prices are reduced to inspire demand. This often leads to further economic decline. Reflation marks an attempt to increase money supply to increase spending in an attempt to spur growth. See also: Inflation.

reflation

an increase in the level of NATIONAL INCOME and output. A reflation is often deliberately brought about by the authorities in order to secure FULL EMPLOYMENT and to increase the rate of ECONOMIC GROWTH. Instruments of reflationary policy include fiscal measures (for example, tax cuts) and monetary measures (for example, lower interest rates). See also FISCAL POLICY, MONETARY POLICY, DEFLATIONARY GAP, DEMAND MANAGEMENT.
References in periodicals archive ?
Call it the Bernanke reflation, though it's more precise to call it the Fed's second inflation gamble of the decade.
Lost in all of this domestic focus is the fact that there are also major risks to the Fed's reflation.
But they cautioned that reflation was no substitute for reform via debt forgiveness, write-downs and recapitalisation of banking systems.
The dollar had depreciated, and the new administration in its reflation policy counted on further depreciation.
Think about geography: Among developed markets, we continue to favor overweight positions in US stocks, where reflation policy has been the most aggressive.
The two most daunting threats for the year ahead are the prospect of higher interest rates and the unintended consequences of Japan's generally welcome policies of radical reflation.
Three possible outcomes exist: deflation where prices fall and the real cost of borrowing goes up; reflation where prices stabilise and interest rates return to normal levels; and inflation where prices rise quickly and cause economic disruption, as central banks are forced to raise interest rates aggressively.
None of this looks particularly favourable - unless the attempted reflation of aggregate demand is doomed to end in failure.
We believe that 2010 will be a year of reflation, but structural headwinds lie ahead of us and could turn 2010 into a rollercoaster ride.
Khelil told a news briefing, held in the Austrian capital two days after OPEC (Organization of Petroleum Exporting Countries) meeting, that he expected that the G20 summit, due to take place on April 2 in London, would end with the adoption of a global economic reflation programme to contribute in supporting oil prices.
ONE ONLY NEEDS to look to the significant rises in all manner of commodity prices to see that reflation is taking hold and will eventually work its way into consumer prices.