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Deflationary Meaning: Definition, Examples, and Translations

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deflationary

[dษชหˆfleษชสƒษ™nษ™ri ]

Definition

Context #1 | Adjective

economic condition

Deflationary refers to a situation in an economy where the general price levels of goods and services are falling. This condition often leads to a decrease in consumer spending as people anticipate lower prices in the future, which can result in reduced production and increased unemployment. Deflationary pressures can be harmful, as they may contribute to an economic recession. It is the opposite of inflationary, where prices rise.

Synonyms

contractive, disinflationary.

Examples of usage

  • The deflationary trend has caused concern among economists.
  • Many businesses are struggling in this deflationary environment.
  • Central banks often intervene to counter deflationary pressures.

Translations

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Origin of 'deflationary'

The term 'deflationary' derives from the word 'deflation,' which was first used in the early 20th century, emerging from economic discussions during times of economic crisis. The prefix 'de-' indicates a reversal or reduction, while 'flation' relates to inflation, which comes from the Latin word 'inflatio,' meaning 'to inflate.' Initially, deflation was discussed in the context of the post-World War I economic climate, where many countries experienced significant decreases in prices due to decreased demand and increased supply. Over the decades, the concept has evolved, becoming an essential part of economic theory and policy, especially in light of the Great Depression in the 1930s, which illustrated the devastating effects of prolonged deflationary periods.

Word Frequency Rank

At rank #26,694, this word represents specialized academic or technical vocabulary. It's less frequently encountered but may be valuable in specific contexts.