Search results
Results From The WOW.Com Content Network
If the inflation rate is not very high to start with, disinflation can lead to deflation – decreases in the general price level of goods and services. For example if the annual inflation rate one month is 5% and it is 4% the following month, prices disinflated by 1% but are still increasing at a 4% annual rate.
In addition to disinflation and deflation, there are other economic concepts to be familiar with. Stagflation, for instance, happens when you have rising inflation paired with increasing unemployment.
In economics, deflation is a decrease in the general price level of goods and services. [1] Deflation occurs when the inflation rate falls below 0% (a negative inflation rate). Inflation reduces the value of currency over time, but deflation increases it. This allows more goods and services to be bought than before with the same amount of currency.
Disinflation occurs when the rate of inflation decelerates. During disinflation, wages and prices continue to increase, but the speed of the increase is slower than it was previously.
Inflation has been a feature of history during the entire period when money has been used as a means of payment. One of the earliest documented inflations occurred in Alexander the Great's empire 330 BCE. [26] Historically, when commodity money was used, periods of inflation and deflation would alternate depending on the condition of the ...
While Inflation Can Be Bad, Deflation Is Always Terrible. Modest inflation is a natural part of the economic cycle that might be good news, bad news or no news at all — but deflation is always a ...
Deflation and disinflation are two terms that some people mix up at times but mean very different things with regard to price … Continue reading → The post Disinflation vs. Deflation: Key ...
Just as disinflation is considered an acceptable antidote to high inflation, reflation is considered to be an antidote to deflation (which, unlike inflation, is considered bad regardless of its magnitude). Reflation has also found usage in forensic economics to describe a return to monopolistic (exorbitant) price paths following correction.