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Deflation
Information, links, and resources on deflation, what causes deflation, and deflationary economics.
What is Deflation and How Can it be Prevented?
The article Why Does Money Have Value? explains that inflation occurs when money becomes relatively less valuable than goods. Then deflation is simply the opposite, that over time money is becoming relatively more valuable than the other goods in the economy. Following the logic of that article, deflation can occur because of a combination of four factors:
Why Don't Prices Decline During A Recession?
If we use the analysis from "Why Does Money Have Value" we see that the inflation rate should rise during a boom and fall during a recession. This point was confirmed by "A Beginner's Guide to Economic Indicators". Our analysis would seem to imply that we should expect deflation during a recession. However the economy very rarely experiences deflation.