prijsdeflatie

Prijsdeflatie, often simply called deflatie, refers to a sustained decrease in the general price level of goods and services in an economy. This is the opposite of inflation, where prices generally rise. When deflatie occurs, the purchasing power of money increases, meaning each unit of currency can buy more goods and services than before.

There are several causes for deflatie. One common cause is a decrease in aggregate demand, which can be triggered by factors such as a decline in consumer spending, reduced investment by businesses, or cuts in government spending. Another cause is an increase in aggregate supply, which can result from technological advancements that lower production costs or increased competition. A decrease in the money supply can also lead to deflatie, as there is less money chasing the same amount of goods.

While an increase in purchasing power might seem beneficial, prolonged deflatie can have negative economic consequences. Consumers may postpone purchases, expecting prices to fall further, which further reduces demand and can lead to a downward spiral. Businesses may face declining revenues and profits, leading to layoffs and reduced investment. Deflatie can also increase the real burden of debt, making it harder for individuals and businesses to repay loans. Central banks typically aim to avoid deflatie and may use monetary policy tools, such as lowering interest rates, to stimulate the economy and prevent prices from falling.