deflation

USAGE SUMMARY

The word "deflation" is correct and can be used in written English.
Generally, you can use the word "deflation" to refer to a decrease in the general price level of goods and services. For example, "The recent measures taken by the government have led to deflation in the economy."

✓ Grammatically correct

News & Media

Formal & Business

Science

Human-verified examples from authoritative sources

Exact Expressions

60 human-written examples

With inflation dropping to just 0.5% in December, MPC members were also concerned about the risk of deflation, or falling prices, which are good news for consumers, but can cause severe economic damage if they last for a long period.

The Guardian - Business

Australian growth will be constrained as the global economy lurches towards deflation.

The Guardian - Opinion

White has retired from that role, but the BIS continues to produce an eminently readable report, if to my mind it is too dismissive of the risks of deflation, most notably in the eurozone.

The Guardian - Business

"Where is growth supposed to come from in these peripheral countries when you have extreme deflation imposed on them, essentially by Germany.

The Guardian - Business

Economists said it appeared for now that the UK was experiencing "good" deflation that was boosting spending, rather than prompting people to put off purchases in the hope of lower prices in the future.

The Guardian - Business

The European Central Bank surprised markets on Thursday with fresh measures to boost a flagging eurozone economy threatened with deflation and the risks of an escalating conflict in Ukraine.

The Guardian - Business

It lowered its forecast for inflation this year to 0.6% from a previous forecast of 0.7%, but Draghi said policymakers did not expect outright deflation, despite a current inflation rate of just 0.3%.

The Guardian - Business

The latest figures, with their implicit threat of deflation, make all this much more urgent.

The Guardian - Opinion

Well, here we are, with deflation threatening the continuation of such recovery as the eurozone has seen and, although the present European Central Bank president, Mario Draghi, has called for fiscal relaxation, he is powerless to initiate this, while the Germans continue to behave as though Weimar inflation were round the corner.

The Guardian - Business

Italy is back in recession and approaching deflation; Germany's economy has shrunk and France stagnates.

The Guardian - Opinion

Regional turmoil, Greece's own internal deflation – a process that though savage has produced bargain basement deals – and the introduction of longer opening hours at museums and archaeological sites have helped spur the turnaround.

The Guardian

Expert writing Tips

Best practice

When discussing "deflation", be precise about the scope and duration of the price decreases. Is it a temporary dip or a sustained trend?

Common error

Avoid using "deflation" when you mean disinflation. Disinflation refers to a slowing in the rate of inflation, while "deflation" is an actual decrease in the general price level.

Linguistic Context

The noun "deflation" functions as a subject or object in sentences, referring to the economic phenomenon of a general decline in prices. Ludwig AI confirms this usage, showing examples where "deflation" impacts economic discussions.

Expression frequency: Very common

Frequent in

News & Media

40%

Formal & Business

30%

Science

20%

Less common in

Academia

5%

Encyclopedias

3%

Reference

2%

Ludwig's WRAP-UP

The term "deflation" is a very common economic term referring to a sustained decrease in the general price level of goods and services. Ludwig AI confirms its frequent usage in News & Media, Formal & Business, and Science contexts. It's crucial to distinguish "deflation" from "disinflation", which denotes a slowdown in the rate of inflation. Potential consequences of "deflation" include decreased consumer spending, increased real debt burden, and economic stagnation. Monetary and fiscal policies can be implemented to combat "deflation".

More alternative expressions

Phrases that express similar concepts, ordered by semantic similarity:

decrease in price level

A more technical term for a reduction in the general price level.

falling prices

Highlights the downward movement of prices, a key characteristic of deflation.

negative inflation

Emphasizes the opposite of inflation, indicating prices are falling.

price decrease

Focuses specifically on the reduction of prices, without necessarily implying a broad economic trend.

price reduction

Simply points out the reduction of prices, with no additional economic context.

disinflation

Indicates a slowing in the rate of price inflation, distinct from deflation but related.

economic contraction

Refers to the shrinking of economic activity, which can be associated with deflation.

economic downturn

Describes a decline in economic activity, potentially linked to deflationary pressures.

weakening economy

Implies a general decline in economic health, which may manifest as deflation.

recessionary period

Links deflation to a broader economic recession, where prices may fall due to decreased demand.

FAQs

How is "deflation" different from disinflation?

"Deflation" refers to a decrease in the general price level of goods and services, resulting in a negative inflation rate. Disinflation, on the other hand, is a slowdown in the rate of inflation.

Why is "deflation" considered an economic problem?

"Deflation" can lead to decreased consumer spending and investment as people delay purchases expecting prices to fall further. This can create a deflationary spiral, hurting economic growth.

What are the potential consequences of "deflation"?

Prolonged "deflation" can increase the real value of debt, making it harder for borrowers to repay. It can also lead to lower wages and profits, contributing to economic stagnation.

What measures can be taken to combat "deflation"?

Central banks can implement monetary policies like lowering interest rates or quantitative easing to increase the money supply and stimulate demand, helping to counter deflationary pressures. Fiscal policies, such as increased government spending, can also boost demand.