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 ?
[l1] We estimate that the wealth shock caused by n 1 percent price deflation leads to a 0.16 percent output decline.
'On month on month basis, food inflation was highest in Kogi (2.28%), Plateau (2.42%) and Nasarawa (2.17%), while Akwa Ibom, Benue, Kwara and Ondo all recorded food price deflation in October 2018', said NBS.
The company's internal food price index for the most recent quarter declined and was relatively flat compared to the average quarterly national food price deflation of 3.9% (versus 4.3% inflation in the prior-year quarter).
Mr Coupe gave hope of an easing in the food price deflation that has hit the sector hard, saying it is now running at around minus 1% against falls of up to 2.5% last year.
Martin Davey, chairman of the Hull-based group which supplies products to a range of supermarkets, said it had achieved the results "against a backdrop of food price deflation".
His successor Mike Coupe, who took over from Mr King in July, reported a 1.9% drop in like-for-like sales for the year to March 14 and said food price deflation meant the chain did not expect an improvement this year.
The NSI had reported consumer price deflation on an annual basis in both September and August (-0.8% and -0.6% respectively.)
The February Consumer Price Index for food-at-home edged up 2.8 % from last year--a stark contrast to the nine months of food price deflation that the nation experienced in 2009.
Mark Newton-Jones, chief executive of Shop Direct, said: "We've seen a decade of price deflation on the high street.
Dean Mirfin, Key Retirement Solutions group director, said: "The past year proved tough for all financial service sectors, however the results for the equity release market show that demand is still strong despite a year of house price deflation and understandably issues of confidence amongst consumers."
There was a 7pc fall in like-for-like sales at PC World, because of continued price deflation in the computer hardware market.
NEW YORK-Although unit sales of DVD players are expected to grow this year by more than 7 percent, price deflation will cause retailers to experience a decline in sales dollars by more than 6 percent.