From the Collaborative Bond and Money Market Data Portal
Deflation is a situation, opposite to inflation, wherein there is a sustained decline in the general price level of goods and services in an economy. Deflation can generally be measured by indices such as the Consumer Price Index (CPI). Contrary to temporary price drops, deflation represents a broad and persistent downward trend in the economy.
Some causes of deflation include:
Some consequences of deflation include:
Deflation should not be confused with disinflation, which refers to a state where there is still inflation, but at a declining pace.