Deflation
Deflation is a sustained fall in the general price level. It sounds good, but it can make people delay spending and make debts harder to pay, which deepens downturns.
Japan's long stretch of low growth and falling prices after 1990 and the Great Depression are the classic examples.
Related terms
- Inflation: Inflation is the rate at which prices across the economy rise over time, so each dollar buys less.
- Recession: A recession is a significant, widespread fall in economic activity that lasts more than a few months.
- CPI (consumer price index): The consumer price index tracks the price of a fixed basket of goods and services that households buy.
Practise with $10,000 in play money
Free. No real money involved.
For learning only. This isn't financial advice.