What is "deflation"

deflation \deflation\ n.

1. the act or process of deflating.

2. a fall in the average prices of goods and services; -- usually associated with contraction of economic activity. Opposite of inflation. Compare disinflation.

3. the reduction of available credit or a contraction of economic activity resulting from or associated with a decline of prices.

4. the act of letting the air out of something.

5. (Geol.) the erosion of land structures such as sand or soil due to the action of wind.
   --RHUD

1891, "release of air," from deflate + -ion. In reference to currency or economic situations, from 1920.

n. 1 An act or instance of deflate. 2 (context economics English) A decrease in the general price level, that is, in the nominal cost of goods and services as well as wages. 3 (context economics euphemistic English) An economic contraction.

1. n. (geology) the erosion of soil as a consequence of sand and dust and loose rocks being removed by the wind; "a constant deflation of the desert landscape"

2. a contraction of economic activity resulting in a decline of prices [ant: inflation, disinflation]

3. the act of letting the air out of something [ant: inflation]

Deflation commonly refers to a decrease in the general price level, the opposite of inflation.

Deflation may also refer to:

• A release or escape of air or gas from an inflatable, resulting in its shrinking or collapsing
• The Great Deflation, a period of worldwide economic deflation occurring roughly between the years 1870–1890
• DEFLATE (algorithm), a widely used lossless compression algorithm originating from the program PKZIP
• Eolian erosion, also called deflation
• Deflation (film), a 2001 short film
• Dividing a polynomial by a linear factor which decreases its degree by one. This is done for example in the Jenkins-Traub algorithm.
• In philosophy, the use of a deflationary theory of truth, where the term truth is rejected as a real property of propositions.

In economics, deflation is a decrease in the general price level of goods and services. Deflation occurs when the inflation rate falls below 0% (a negative inflation rate). 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 and services than before with the same amount of money.

Economists generally believe that deflation is a problem in a modern economy because it increases the real value of debt, and may aggravate recessions and lead to a deflationary spiral.

Deflation is distinct from disinflation, a slow-down in the inflation rate, i.e. when inflation declines to a lower rate but is still positive.

Deflation is a 2001 micro-budget short film, written and directed by Roger Ashton-Griffiths. It stars Del Synnott, features Keira Knightley, who also worked as part of the crew, and Sharman Macdonald, her mother, who co-edited the film.