the.com/deflation
the economy holding its breath while everyone waits for prices to drop further
means A general fall in prices across an economy, which sounds nice until you realize people stop spending because everything will be cheaper tomorrow.
from From Latin 'deflare,' to blow away or blow out — 'de-' (down, away) plus 'flare' (to blow), the same root that gives us 'inflate' and 'flatulence.' The economic sense is a modern repurposing: prices, like a balloon, getting the air let out of them.
- spiral risk
- falling prices make people delay buying, cutting demand further
- japan
- fought deflation for nearly three lost decades
- debt killer
- raises real value of what borrowers owe
- great depression
- prices fell roughly 25 percent in early 1930s
- central bank dread
- feared more than moderate inflation by economists
japan lost decade — japan experienced deflation from 1991-2000s after asset bubble burst, with prices falling and gdp stagnating
great depression 1930s — us and global economy contracted sharply with prices falling ~25% and unemployment reaching 25%
eurozone 2014-2015 — several eurozone countries experienced deflation; greece saw -1.6% inflation in 2015 amid debt crisis