DEFLATION (ECONOMICS)

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'Deflation' is a decrease in the general price level over a period of time. Deflation is the opposite of inflation. For economists especially, the term has been and is sometimes used to refer to a decrease in ''the size of the money supply'' (as ''a proximate cause'' of the decrease in the general price level). The latter is now more often referred to as a 'contraction' of the money supply. During deflation the demand for liquidity goes up, in preference to goods or interest. During deflation the purchasing power of money increases.


★ Cato Policy Report - A Plea for (Mild) Deflation

★ ''Deflation'' (EH.Net economic history encyclopedia)

★ What is deflation and how can it be prevented? (About.com)

★ Deflation, Free or Compulsory from ''Making Economic Sense'' by Murray N. Rothbard

★ Annual Inflation Rate - Japan