You have probably come across inflation, but deflation you may now have come across.

However given that a balloon can inflate and deflate, you would expect deflation to be the opposite of inflation!

Deflation is indeed a general decrease in prices overall, and often is linked to a period of tough economic conditions. Usually monetary policy has a big influence on deflation coming into effect: such as hefty taxation.

Related Articles

Write off
Gross margin
Futures exchange
Central bank

More Financial Words and Vocabulary Explained