Disinflation

From Wikipedia, the free encyclopedia

Disinflation is a decrease in the rate of inflation. Being how much prices are increasing per unit of time, it can be expressed using the word disinflation: The slowing of the rate of inflation per unit of time.

For example in one month the rate of inflation could be was 4.4% and in May the rate of inflation was 4.0%. In this instance the price of goods and services is still increasing; however, it is increasing at a slower rate, 0.4% less, than a month before. It should not be confused with deflation, which is an overall decrease in prices.

Disinflation is generally considered to be a very positive state for the economy. Over the last twenty years North America has seen steady disinflation, and many credit this with the strong growth during this period.^{[citation needed]} While disinflation is generally perceived as positive, it is not good for the effect to go so far as deflation, which is generally perceived to be a very negative state for an economy.