Noninflationary

Noninflationary refers to a state or condition where there is little to no increase in the general price level of goods and services within an economy over a period of time. This means that the purchasing power of money remains relatively stable, and individuals can buy roughly the same amount of goods and services with their money as they could before.

Economies are typically considered noninflationary when inflation rates are very low, often near zero percent, or when deflation, a sustained decrease in the general price level, is absent. A noninflationary environment is generally seen as beneficial for economic stability and planning. Businesses can forecast costs and revenues with more certainty, and consumers are less likely to delay purchases in anticipation of future price drops.

Central banks often aim for a low and stable inflation rate, which is close to but not necessarily exactly zero. Some economists argue that a small, positive inflation rate can be beneficial by preventing the economy from falling into deflation, which can be harmful. However, the term "noninflationary" specifically describes the absence of significant price increases.

Factors contributing to a noninflationary environment can include stable aggregate demand, sufficient supply of goods and services, and prudent monetary and fiscal policies. Conversely, rapid increases in the money supply or significant supply shocks can lead to inflation, moving an economy away from a noninflationary state.