Tag: liquidity-trap

1 page tagged liquidity-trap.

Pages

Chapter 47: Disinflation and Deflation — Economics 101

Disinflation — a falling inflation rate — is generally beneficial, bringing lower interest rates and stable expectations. Deflation — a falling price level — is a trap: it induces consumers and firms to delay spending, collapses demand, and defeats the central bank’s primary tool once interest rates hit zero.