disinflate

disinflation | Business English

disinflation
noun[ U ]
 ECONOMICSuk /ˌdɪsɪnˈfleɪʃən/us
a situation in which a country's prices go down, or do not go up as quickly as before:
He told clients that disinflation could result in one or two quarters of flat or even negative economic growth.

Examples of disinflation

disinflation
For smaller disinflations, the qualitative results still hold; however, the scale of the output effects are smaller.
To this end, the more debatable issue is how costly disinflations really are.
Over an extended time, these short-term losses will not be as costly as a quick disinflation.
More practically, the loss of credibility by the central bank will greatly reduce both the maximum achievable net output, and the optimal disinflation length.
The resurgence of actual and prospective disinflation in industrialized countries has resulted in new interest in the possibility of self-fulfilling deflationary expectations.
This paper analyzes exchange-rate dynamics following a money-based disinflation under different degrees of exchange-rate pass-through.
As more firms are able to update their prices to reflect the disinflation, the money path overshoots the aggregate price level producing the boom.
Recall that a disinflation implies a fall in the expected inflation rate and the nominal interest rate and therefore a rise in money demand.
The costs of disinflation are immediate but transitory; the benefits of the disinflation are permanent but delayed.
With a twoperiod disinflation, inflation inertia is less problematic: relative prices are closer to the profit-maximizing level if firms were allowed to continuously reset.
Figure 2 shows that, in this case, optimal policy smooths the short-run costs over time by taking a gradual approach to disinflation.
Again, we assume the announcement is fully credible and that the disinflation program is not known in advance. 22.
To simulate a disinflation, it is necessary to derive starting values for the predetermined variables based on an initial inflationary steady state.
In order to simulate a disinflation it is necessary to derive starting values for variables based on an initial inflationary steady state.
As a result, welfare overall is higher under the gradualist disinflation.
See all examples of disinflation
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