Disinflation


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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 ?
The Committee assesses that maintaining a sustained disinflation process is the key for achieving lower sovereign risk, lower long-term interest rates, and stronger economic recovery.
The results suggest that disinflation in a small open economy is associated with larger short-term output losses than in a closed economy due to real exchange rate appreciation.
"The disinflation in Zimbabwe is therefore a good development as it increases the consumers' purchasing power," he said.
Its economy is still suffering with disinflation and the recent devaluation in the Euro might inspire its central bank to weaken its currency to not only combat disinflation, but to ensure export competitiveness.
The odds of this high-growth scenario playing out are perhaps reflected in how well equity markets have held up despite worries about disinflation, patchy economic growth and the possibility that Greece could return to the emergency room.
Disinflation is used when the inflation rate has fallen marginally over the short term.
That is, some disinflation (fall in inflation) called for by the models is missing in the sense that it hasn't occurred.
has been experiencing disinflation -- the core personal consumption expenditures index, for example, has fallen to 1.2% from 1.8% in the previous year.
ECB officials currently experiencing "disinflation" not "deflation"
The weekly CPI structure reveals that disinflation in eggs and deflation in gasoline helped inflation to abate.
The board of the National Bank of Romania (NBR) decided on Monday to cut the key interest rate from 4.5 percent to 4.25 percent and maintain the current minimum reserve requirement ratios on both leu and foreign currency denominated liabilities of credit institutions.The NBR said it had room for monetary easing due to the resumption in disinflation, estimating the annual inflation rate will fall below its target of 2.5 percent in the next period."The recent pass-through of the policy rate cut to interbank rates and government bond yields shows the consolidation of monetary policy transmission.
Headline CPI embarks on disinflation trend, underlying inflation under control