Deflationary spiral

Deflationary spiral

In economics, a deflationary spiral is a situation where decreases in price lead to lower production, which in turn leads to lower wages and demand, which leads to further decreases in price. Since reductions in general price level are called deflation, a deflationary spiral is when reductions in price lead to a vicious circle, where a problem exacerbates its own cause. The Great Depression was regarded as a deflationary spiral.

Economic theory

A deflationary spiral is the modern macroeconomic version of the general glut controversy of the 19th century.

References


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  • deflationary spiral — noun an episode of deflation in which prices and wages decrease at an increasing rate and currency gains in value • Ant: ↑inflationary spiral • Hypernyms: ↑spiral …   Useful english dictionary

  • deflationary spiral. — See under spiral (def. 7). * * * …   Universalium

  • deflationary spiral. — See under spiral (def. 7) …   Useful english dictionary

  • deflationary spiral — /dəfleɪʃənri ˈspaɪrəl/ (say duhflayshuhnree spuyruhl) noun Economics a decline in prices which prompts consumers to delay spending which in turn prompts a further decline in prices and a contraction of asset values …  

  • spiral — spirality /spuy ral i tee/, n. spirally, adv. /spuy reuhl/, n., adj., v., spiraled, spiraling or (esp. Brit.) spiralled, spiralling. n. 1. Geom. a plane curve generated by a point moving around a fixed point while constantly receding from or… …   Universalium

  • spiral — I. /ˈspaɪrəl / (say spuyruhl) noun 1. a plane curve traced by a point which runs continuously round and round a fixed point or centre while constantly receding from or approaching it. 2. a single circle or ring of a spiral or helical curve or… …  

  • deflationary — UK [diːˈfleɪʃ(ə)n(ə)rɪ] / US [dɪˈfleɪʃ(ə)nˌerɪ] adjective economics causing prices and the level of economic activity to become lower or to stop increasing a deflationary spiral …   English dictionary

  • spiral — {{Roman}}I.{{/Roman}} noun ADJECTIVE ▪ vicious ▪ downward, upward ▪ deflationary, inflationary ▪ wage price ▪ …   Collocations dictionary

  • deflationary — adj. Deflationary is used with these nouns: ↑spiral …   Collocations dictionary

  • inflationary spiral — noun an episode of inflation in which prices and wages increase at an increasing rate and currency rapidly loses value • Ant: ↑deflationary spiral • Hypernyms: ↑spiral * * * noun : a continuous rise in prices that is sustained by the tendency of… …   Useful english dictionary

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