deflation

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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 ?
Perhaps this is so because deflationism has some inherent limitations: one can be a deflationist in one philosophical area, but that prevents one from being a thoroughgoing deflationist in another.
Even though commercial bank reserves have expanded exponentially, the deflationists see little possibility of either monetary or price inflation, because credit has remained scarce, and is likely to remain so.
Why do deflationists believe the world will flock to the safety of paper?
Rather than cast my lot with either the deflationists or non-deflationists, I would like to question the way in which the debate itself has been framed.
The metaphysics of ordinary objects has come under attack from metaontological deflationists who argue that answers to ontological questions are not metaphysically substantive--"substantive" in the sense that answers to these questions are best given, not by interesting reflection on the nature of reality, but through reflection on our language and concepts.
This difference used to be very easy to delineate, with deflationists denying, and inflationists asserting, that truth is a property, but more recently the debate has become more complicated, owing primarily to the fact that many contemporary deflationists often do allow for truth to be considered a property.