What is 'Deflation'?

Deflation is the decline in prices for goods and services that happens when the inflation rate dips below 0%. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Term of the Day | Words to Know Deflation Deflation is a general decline in prices for goods and services, typically associated with a contraction in the supply of money and credit in the economy. During deflation, the purchasing power of currency rises over time. Read More » Related to "Deflation" What causes deflation? Find out what deflation is, what causes it, how it hurts the economy and how it can lead to a worsening cycle of deflation that is hard to break. Read More » Can Deflation Ever Be Good? General economic theory consensus rules that deflation is bad for the economy. But the Swiss economy is growing despite a drop in prices. Read More » Inflation and Deflation: Keep Your Portfolio Safe Inflation and deflation are opposite sides of the same coin. When both threaten, here's how to construct your diversified portfolio to keep it safe. Read More » SPONSORED BY FIDELITY INVESTMENTS Investing in Women in More Ways Than One Hiring and retaining women is essential to making financial expertise broadly accessible. Here's why Fidelity is prioritizing women's career growth and potential. Learn More » Related Definitions Inflation Inflation is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling. Read More » Central Bank A central bank is an entity responsible for the monetary system of a nation or a group of nations. Read More » Milton Friedman Milton Friedman was an American economist and statistician best known for his strong belief in free-market capitalism. Read More » Monetary Policy Actions of a central bank or other agencies that determine the size and rate of growth of the money supply, which will affect interest rates. Read More » CONNECT WITH INVESTOPEDIA Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here. 114 West 41st St, floor 8 New York NY 10036 © 2020, Investopedia, LLC, All Rights Reserved | Privacy Policy