Deflation, the opposite of inflation, is a gradual drop in the cost of goods and services, usually caused by a surplus of goods and a shortage of cash.
Although deflation seems to increase your buying power in its early stages, it is generally considered a negative economic trend. That's because it is typically accompanied by rising unemployment, falling production, and limited investment.
- Browse Related Terms: bull market, Correlation, Countercyclical stock, Crash, Cyclical stock, Defensive security, deflation, Depression, inflation, Market cycles, Secular market
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