Disinflation


Also found in: Dictionary, Thesaurus, Wikipedia.

Disinflation

A decrease in the rate of inflation.

Disinflation

A situation in which the inflation rate decreases, but does not reverse. For example, disinflation occurs when the inflation rate goes from 5% to 2%. Importantly, it is not deflation when the inflation rate becomes negative. Disinflation is considered a normal and healthy part of a business cycle.

disinflation

A slowdown in the rate of inflation. A drop in the inflation rate from 3% in one year to 2% in the next year is an example of disinflation. On an overall basis, disinflation is good for security prices, but it can be painful for individual companies that have made investment and borrowing decisions based upon a belief that a high rate of inflation would continue. See also inflation.

Disinflation.

Disinflation is a slowdown in the rate of price increases that historically occurs during a recession, when the supply of goods is greater than the demand for them.

Unlike deflation, however, when prices for goods actually drop, disinflation prices do not usually fall, but the rate of inflation becomes negligible.

disinflation

a fall in the general price level, frequently accompanied by a reduction in the level of national income (DEFLATION). A disinflation is often deliberately brought about by the authorities in order to combat INFLATION and to eliminate a BALANCE OF PAYMENTS deficit. Instruments of disinflationary policy include fiscal measures (e.g. tax increases), monetary measures (e.g. higher interest rates), and prices and income controls. See FISCAL POLICY, MONETARY POLICY, PRICES AND INCOME POLICY, INFLATIONARY GAP, INTERNAL-EXTERNAL BALANCE MODEL.
References in periodicals archive ?
Disinflation is a decline in the rate of price increase and differs from deflation which is caused by businesses lowering prices in a desperate attempt to get consumers to buy their products.
For example, the common consensus is that UK inflation levels are going to continue weakening and possibly enter a short-term disinflation period before inflation rises again later on.
Deflation, inflation, and disinflation represent different behaviours of the price level.
That is, some disinflation (fall in inflation) called for by the models is missing in the sense that it hasn't occurred.
s recent disinflation has resulted from technological innovations that raise economic performance and potential," Levy writes.
The differing patterns among these various measures suggest that comparisons between the 2010 disinflation and today's disinflation might benefit from digging into the details.
The disinflation process continues as the pass-through from wage adjustments is strengthening and domestic demand remains under pressure," said Eurobank economist Platon Monokroussos.
4 years would be needed to achieve disinflation from 40% to 10% annually.
Endogenous pricing models imply that price adjustment is less frequent, and disinflation more costly, when firm-specific volatility is low.
Lack of Credibility, Inflation Persistence and Disinflation in Colombia *
Weak economic activity and this year's appreciation of the krona continue to support disinflation,' it added.
Zhang (2005) found a negative relationship between sacrifice ratios and initial inflation rates, and the cost of reducing inflation is generally lower when the speed of disinflation is faster.