alkemical
03-03-2011, 07:07 AM
http://en.wikipedia.org/wiki/Deflation
In economics, deflation is a decrease in the general price level of goods and services.[1] Deflation occurs when the annual inflation rate falls below 0% (a negative inflation rate). This should not be confused with disinflation, a slow-down in the inflation rate (i.e. when inflation declines to lower levels).[2] Inflation reduces the real value of money over time; conversely, deflation increases the real value of money – the currency of a national or regional economy. This allows one to buy more goods with the same amount of money over time.
Economists generally believe that deflation is a problem in a modern economy because of the danger of a deflationary spiral (explained below).[3] Deflation is correlated with depressions – including the Great Depression, as banks defaulted on depositors. Additionally, deflation may cause the economy to enter a liquidity trap. However, historically not all episodes of deflation correspond with periods of poor economic growth.[4]
http://www.mint.com/blog/finance-core/a-visual-guide-to-deflation/
http://www.mint.com/blog/wp-content/uploads/2009/04/visualguidetodeflation2.jpg
In economics, deflation is a decrease in the general price level of goods and services.[1] Deflation occurs when the annual inflation rate falls below 0% (a negative inflation rate). This should not be confused with disinflation, a slow-down in the inflation rate (i.e. when inflation declines to lower levels).[2] Inflation reduces the real value of money over time; conversely, deflation increases the real value of money – the currency of a national or regional economy. This allows one to buy more goods with the same amount of money over time.
Economists generally believe that deflation is a problem in a modern economy because of the danger of a deflationary spiral (explained below).[3] Deflation is correlated with depressions – including the Great Depression, as banks defaulted on depositors. Additionally, deflation may cause the economy to enter a liquidity trap. However, historically not all episodes of deflation correspond with periods of poor economic growth.[4]
http://www.mint.com/blog/finance-core/a-visual-guide-to-deflation/
http://www.mint.com/blog/wp-content/uploads/2009/04/visualguidetodeflation2.jpg