Plain-English definitions, reviewed by an independent investor
Deflation
Deflation is falling prices, which sounds nice but can choke spending and deepen debt burdens.
Deflation is falling prices, which sounds nice but can choke spending and deepen debt burdens.
(Negative inflation; prices decline over time)
Why it matters
It is the rare, dangerous reverse that traps economies in slowdown.
Common confusion
When prices fall, buyers wait, profits shrink, and real debt grows.
Frequently Asked Questions
Why is deflation bad?
It encourages waiting and raises the real cost of debt, spiralling demand down.
Deflation vs disinflation?
Disinflation is slower price rises; deflation is actual declines.