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Disinflation is a decrease in the rate of inflation – a slowdown in the relative rate of increase of the general price level of goods and services in a nation's gross domestic product over time. It is the opposite of reflation.
If the inflation rate is not very high to start with, disinflation can lead to deflation – decreases in the general price level of goods and services. For example if the annual inflation rate one month is 5% and it is 4% the following month, prices disinflated by 1% but are still increasing at a 4% annual rate. If the current rate is 1% and it is -2% the following month, prices disinflated by 3% and are decreasing at a 2% annual rate.
See also
- Hyperinflation
- Stagflation
- Devaluation
- Chronic inflation
- Deflation
References
Further reading
External links
- Globalization and Global Disinflation by Kenneth Rogoff, at IMF.com
- What is Disinflation by Timothy McMahon, at InflationData.com
- http://www.voxeu.org/index.php?q=node/3025
- investopedia.com - Disinflation
- http://economia.unipv.it/pagp/pagine_personali/gascari/disiflation_msvsirr_may_2011.pdf