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Deflation

A reduction in the amount of money in circulation. Such a reduction, ceteris paribus, can drive down prices. A drop in prices, called price deflation, can also occur due to an increase in productivity or in increase in demand for money

Related Publications

ARCHIVE

New Worry: Deflation

NOVEMBER 21, 2008

With the stock market crumbling and the economy shrinking, a whiff of deflation is in the air.... But economists warn that sustained deflation -- a period of falling overall prices -- would deepen the nation's economic troubles. (Washington Post, Friday)

When will we realize that money is too important to be trusted to government?

FEE Timely Classic
The Dreaded D Word by Christopher Mayer

Related Freeman Articles

IN BRIEF

Deflation Fears Emerge

JANUARY 09, 2012

ARTICLE

Are We Headed for Deflation – or Inflation?

Keynesians versus Austrians.

SEPTEMBER 15, 2010 by WILLIAM L. ANDERSON

The inflation wolf may well be at the door, but we need to do a better job of explaining why the current situation exists.

OUR ECONOMIC PAST

The History of Deflation

Deflation Is Not Such a Bad Thing

MARCH 01, 2003 by STEPHEN DAVIES

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CURRENT ISSUE

December 2014

Unfortunately, educating people about phenomena that are counterintuitive, not-so-easy to remember, and suggest our individual lack of human control (for starters) can seem like an uphill battle in the war of ideas. So we sally forth into a kind of wilderness, an economic fairyland. We are myth busters in a world where people crave myths more than reality. Why do they so readily embrace untruth? Primarily because the immediate costs of doing so are so low and the psychic benefits are so high.
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