Deflation

What is it? The opposite of inflation, deflation occurs when consumer prices fall. Most people think of the Great Depression when deflation is mentioned. But mild deflation, just like mild inflation, can be good for the economy, and stocks historically have done well during such times. A severe deflation, however, can be devastating. Assets, such as real estate and stocks, decline in value along with consumer prices. People feel less wealthy and spend less money. Eventually, the economy can spiral into a depression.

Added By: Nathan

Send To Friends!

If you'd like to send the Deflation definition to yourself or to your friends/colleagues, just enter the e-mail addresses in the boxes below -

We hope you now understand the meaning of Deflation. If you need any more information on this term, please don't hesitate to contact us.