deflation[dē flā′s̸hən, di-]
- a deflating or being deflated
- a reduction in the general level of prices as a result of a severe decline in economic activity
- Geol. erosion by the wind
- The act of deflating or the condition of being deflated.
- A persistent decrease in the level of consumer prices or a persistent increase in the purchasing power of money.
- The lifting and removal of small, loose particles, especially silt and clay particles, by eddies of wind.
deflation - Investment & Finance Definition
Declining prices for goods, services, and/or assets that are caused by decreases in personal, government, or investment spending. Deflation can also be caused by a reduction in the supply of money or credit, according to monetarists. Inflation, which is an increase in prices, is the opposite of deflation. Both can be damaging to the economy if they are at excessive levels.