Glossary · from the DESK dictionary
Deflation
A sustained decline in the general price level in an economy — the opposite of inflation.
In plain words
When prices fall over time instead of rising — sounds good for consumers, but is often economically problematic.
In more detail
Deflation can trigger a dangerous downward spiral: consumers delay purchases expecting even lower prices, which weakens the economy further (see Japan's 'lost decades').
What it means for traders
A central macroeconomic risk that central banks often fear more than moderate inflation.
Common pitfalls
Can lead to a self-reinforcing pullback in consumption and investment.
Related terms
Deflationary Spiral · Disinflation · Inflation
From the DESK dictionary. For information only, not investment advice.
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DESK is a research tool and not investment advice. Page generated: 2026-10-12.