deflation

American  

[dih-flay-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

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

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Etymology

Origin of deflation

First recorded in 1890–95; deflate + -ion

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Compare meaning

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

• disinflation vs. deflation

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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

See Examples For:

deflation

As well as the growth in corporate bonds, other countries' debt is looking more attractive -- for instance, yields are rising in Japan as inflation has returned following decades of deflation.

From Barron's ● Oct. 21, 2026

In February, before the war in the Middle East broke out, Thailand was still suffering from deflation.

From The Wall Street Journal ● Oct. 14, 2026

Until recently the country had experienced very low inflation or deflation - falling prices - for around three decades.

From BBC ● Sep. 18, 2026

The full consequences of state-driven manufacturing overcapacity have yet to be felt, but the early signs of another deflationary shock, perhaps as serious as the deflation of the real-estate bubble, are rippling through the economy.

From The Wall Street Journal ● Aug. 17, 2026

I follow the same tortured trajectory over and over—from my rush of disbelieving joy to my crashing deflation.

From "Water for Elephants" by Sara Gruen

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Related Words

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

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