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Glossary Political Economy / Term

Deflation

The opposite of inflation -- that is, a sustained fall over time in the general level of prices, normally measured by the annual percentage increases or decreases of a weighted index of prices of some large and representative sample of goods and services (both consumers' goods and producers' goods) regularly traded in the particular economy under consideration. Just as very large scale inflations are normally the result of large percentage increases in the money stock, large-scale deflations are normally the consequence of substantial reductions in the available money stock.

[See also: inflation]

Permanent link Deflation - Creation date 2020-06-14


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