deflation

American  

[dih-fley-shuhn] / dɪˈfleɪ ʃən /

noun

1. the act of deflating or the state of being deflated.

2. Economics. a fall in the general price level or a contraction of credit and available money (opposed to inflation).

3. the erosion of sand, soil, etc., by the action of the wind.

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deflation British  

/ dɪˈfleɪʃən /

noun

1. the act of deflating or state of being deflated

2. economics a reduction in the level of total spending and economic activity resulting in lower levels of output, employment, investment, trade, profits, and prices Compare disinflation

3. geology the removal of loose rock material, sand, and dust by the wind

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deflation Scientific  

/ dĭ-flā′shən /

1. The lifting and removal of fine, dry particles of silt, soil, and sand by the wind. Deflation is common in deserts and in coastal areas that have sand dunes.

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deflation Cultural  

1. A decrease in prices, often stated as an increase in the value of money, related to a decline in spending by consumers. (Compare inflation.)

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Other Word Forms

• deflationary
  adjective
• deflationism
  noun
• deflationist
  noun
• nondeflation
  noun
• nondeflationary
  adjective
• self-deflation
  noun

Etymology

Origin of deflation

First recorded in 1890–95; deflate + -ion

Compare meaning

How does deflation compare to similar and commonly confused words? Explore the most common comparisons:

• disinflation vs. deflation

Explanation

In economics, when prices drop it's called deflation. Deflation makes money more valuable — prices are lower, so you can buy more with it. But deflation is also what happens to a tire if it runs over a nail. Bummer. When economists talk about inflation, they mean that prices are very high, and it takes more cash to buy things. Deflation is the opposite—it's also known as a negative inflation rate. Deflation is dangerous for the economy, and it's connected with era like the Great Depression of the 1930s. Deflation literally means "a loss of air," and you can use it that way too: "The deflation of my tires meant I wasn't going anywhere."

Example Sentences

Unless we experience actual deflation, which is rare, painful and something the Federal Reserve actively works to avoid, prices typically stay at their new higher level.

From MarketWatch • May 13, 2026

There was an audible buzz when a cluster of people were about to walk through, but then a sense of immediate deflation when it turned out merely to be John Thune or Chuck Schumer.

From Slate • Apr. 28, 2026

It would not surprise me if Spurs score first for them to have a bit of hope but then Brighton will come back, and you can kind of see the deflation happening.

From BBC • Apr. 16, 2026

A surge in energy costs triggered by the war in Iran pushed up producer prices in China, snapping a streak of factory deflation in the country that lasted more than three years.

From The Wall Street Journal • Apr. 10, 2026

“Exactly! Any kind! But what about hurt feelings? What about deflation of one’s ego? What about the blasting of one’s hopes? Is that injury?”

From "I, Robot" by Isaac Asimov

Related Words

• bankruptcy
• collapse
• decline
• downturn
• hard times
• inflation
• shakeout
• slide
• slump
• stagnation
• unemployment