deflációról

Deflációról refers to a sustained decrease in the general price level of goods and services in an economy over a period of time. This is the opposite of inflation, which is a general increase in prices. When deflation occurs, the purchasing power of money increases, meaning that each unit of currency can buy more goods and services than before.

Deflation can be caused by several factors, including a decrease in the money supply, an increase in the supply of goods and services, or a decrease in aggregate demand. A common cause is a reduction in the amount of money circulating in the economy, which can happen if central banks tighten monetary policy. Another cause can be a significant increase in productivity or technological advancements that lead to lower production costs and thus lower prices for consumers. A sharp decline in consumer or business spending can also lead to deflation.

While lower prices might seem beneficial to consumers initially, prolonged deflation can have negative economic consequences. Businesses may reduce production and investment because they expect prices to fall further, leading to lower profits. This can result in job losses and economic stagnation. Consumers might delay purchases, anticipating even lower prices in the future, further dampening demand. Debt burdens also become heavier in real terms during deflation, as borrowers must repay loans with money that is worth more than when they borrowed it. Governments and central banks typically aim to avoid deflation and maintain a low, stable rate of inflation.