Disinflation is a decrease in the rate of inflation – a slowdown in the relative rate of increase of the general price level of goods and services in a nation's gross domestic product over time. It is the opposite of reflation. If the inflation rate is not very high to start with, disinflation can lead to deflation – decreases in the general price level of goods and services. For example if the annual inflation rate one month is 5% and it is 4% the following month, prices disinflated by 1% but are still increasing at a 4% annual rate. If the current rate is 1% and it is -2% the following month, prices disinflated by 3% and are decreasing at a 2% annual rate.
See also Hyperinflation Stagflation Devaluation Chronic inflation Deflation
References
Further reading Meltzer, A.H. (2006), "From Inflation to More Inflation, Disinflation, and Low Inflation", American Economic Review, 96 (2): 185–188, doi:10.1257/000282806777211900, S2CID 3789479 Goodfriend, M.; King, R.G. (2005), "The incredible Volcker disinflation", Journal of Monetary Economics, 52 (5): 981–1015, CiteSeerX 10.1.1.484.439, doi:10.1016/j.jmoneco.2005.07.001 {{citation}}: Cite uses deprecated parameter |citeseerx= (help) Calvo, G.A.; Celasun, O.Y.A.; Kumhof, M. (2003), "Inflation Inertia and Credible Disinflation-The Open Economy Case", NBER Working Paper No. 9557, doi:10.3386/w9557 Siklos, P.L.; Waterloo, O.N.; Zhang, Y.; Ottawa, O.N. (2006), "Inflation, Disinflation, and Deflation in China: Identifying the Shocks Driving Inflation" (PDF), Western Economic Association Meetings in San Diego, California, and the Summer Workshop of the Hong Kong Institute for Monetary Research, archived from the original (PDF) on 2016-03-03, retrieved 2008-11-17 Guillermo Calvo; Carlos A. Vegh (1999), "Inflation Stabilization and BOP Crisis in Developing Countries", NBER Working Paper No. 6925, doi:10.3386/w6925
External links Globalization and Global Disinflation by Kenneth Rogoff, at IMF.com What is Disinflation by Timothy McMahon, at InflationData.com http://www.voxeu.org/index.php?q=node/3025 investopedia.com - Disinflation http://economia.unipv.it/pagp/pagine_personali/gascari/disiflation_msvsirr_may_2011.pdf Archived 2012-04-25 at the Wayback Machine