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Deflation

Consumers might wish for prices to drop, but here's why deflation is not a good thing

by Samantha Fields
Mar 12, 2024
Most of the time deflation is a signal of a struggling economy. Disinflation — when prices still increase, just more slowly — is the goal.
Once prices go up, it’s unusual for them to drop.
Justin Sullivan/Getty Images
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What makes Japan’s economy the odd man out? 

by Sabri Ben-Achour , Nic Perez , Erika Soderstrom and Natalie White
Jan 26, 2024
In an effort to stimulate a sluggish economy, the government got creative and started applying negative interest rates.
Bank of Japan Governor Kazuo Ueda speaks at a press conference.
Kazuhiro Nogi/AFP via Getty Images
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What's the difference between disinflation and deflation?

by Elizabeth Trovall
Dec 18, 2023
Inflation has fallen sharply in the last year and a half, but prices haven't come down. Economists say that's not a bad thing.
You can compare changes in consumer prices to driving a car. Disinflation is like reducing your speed, but still moving ahead. Deflation, however, would be driving in reverse.
Scott Olson/Getty Images
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I've Always Wondered ...

Should the U.S. be worried about deflation? 

by Janet Nguyen
Sep 29, 2023
As price gains cool down, we consider the risk that the trend will go too far. Plus, is consumer sentiment a trustworthy indicator of economic activity?
Price gains have been on the decline after a bout of decades-high inflation that started during the pandemic. It's a welcome change for consumers, but deflation is another threat to the economy.
Joe Raedle/Getty Images
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In China, prices have been falling for too long

by Sabri Ben-Achour , Jennifer Pak and Alex Schroeder
Aug 16, 2023
Deflation has led to lost revenue for companies, layoffs, and decreased consumer spending.
Falling prices might be what the U.S. is aiming for, but in China, too much of a good thing is leading to layoffs and decreased spending.
Greg Baker/AFP via Getty Images
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China's economy is slowing. Is the political economy to blame?

by Kai Ryssdal and Sean McHenry
Aug 9, 2023
Adam Posen of the Peterson Institute says that implementation of the zero-COVID policies made people feel "very insecure."
According to Adam Posen, it's been difficult for China's leaders to re-establish trust after the implementation of zero-COVID. "We've already seen leaders from the Communist Party around President Xi Jingping say, 'Oh, no, we want a vibrant private sector in China, said Posen. "But it's hard to be credible once you get to that point."
Ken Ishii-Pool/Getty Images
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Japanese shocked by rising prices after decades of economic stagnation

by Mariko Oi
Jun 20, 2022
Japan had struggled to even reach the central bank inflation target of 2%.
Japanese consumers have come to expect stable prices, making it difficult for stores to consider increasing them.
Yuichi Yamazaki/Getty Images
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Government data seems to show inflation's slowing. But that doesn't mean prices will fall.

by Justin Ho
May 10, 2022
In some ways, falling prices would actually be bad news for the economy.
Americans are frustrated with inflation in the prices of everyday items, but deflation would cause its own problems.
Frederic J. Brown/AFP via Getty Images
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What's disinflation, and why does it matter?

by Sabri Ben-Achour
Jul 30, 2020
Slowing inflation isn't as dangerous as prices dropping for a long period of time. But it's important to keep disinflation in check.
The menu of a ramen restaurant, for instance, can illustrate inflation, disinflation or deflation.
Frederic J. Brown/AFP via Getty Images
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COVID-19

Falling producer price index fans fears of deflation

by Mitchell Hartman
May 13, 2020
Prices of many goods are dropping as demand slows and people stay at home more. But does this mean deflation is here to stay?
A warehouse in China. Producer prices have softened as economic activity has slowed.
Wang He/Getty Images
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