/ dəfleɪʃn̩ /
Množina reči deflation je deflations.
1. A contraction of economic activity resulting in a decline of prices.
2. The act of letting the air out of something.
In economics, a reduction in the level of economic activity, usually caused by an increase in interest rates and reduction in the money supply, increased taxation, or a decline in government expenditure.
Deflation may be chosen as an economic policy to improve the balance of payments, by reducing demand and therefore cutting imports, and lowering inflation to stimulate exports. It can reduce wage increases but may also increase unemployment.