deflation(redirected from Deflation (economics))
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in economics, persistent and relatively large increase in the general price level of goods and services. Its opposite is deflation, a process of generally declining prices. The U.S.
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deflation(ECONOMICS) a decrease over time in the general level of prices, coupled with an overall reduction in the level of economic activity, new investment, etc. (compare INFLATION). In modern capitalist economies, in which inflation tends to be endemic, deflation is usually relative rather than absolute, involving a reduction in rates of price increase rather than an absolute decrease in prices.
the decrease of monetary volume by means of the withdrawal from circulation of excess paper money. Deflation often precedes monetary reforms. Since World War II deflation has most often been encountered as part of the so-called deflation policy of capitalist states, which aims at stopping or decreasing the rates of growth of monetary volume and commodity prices. Deflation is realized through limitation of credits (an increase in the rate of interest, imposition of credit limits), higher taxes, reduction of expenditures for social and cultural needs, a “freeze” on wages and salaries, and other measures carried out by capitalist states. These measures result in a lowering of the rate of economic development, a deterioration in the living conditions of the toiling masses, and an intensification of the class struggle.
the disintegration of rocks and soils owing to wind action, accompanied by the removal and wearing away of the broken particles. Deflation is particularly strong in those parts of deserts from which dominant winds blow (for example, in the southern part of the Karakumy desert). The processes of deflation and physical weathering result in the formation of eroded cliffs with unusual shapes, such as towers, columns, and obelisks.