Falling demand and lower costs of production cause deflation

'Good deflation' happens when prices naturally track with supply, meaning prices change gradually

This tends to make products and services more affordable and normalizes the standard of living. Bad deflation usually happens when there are sudden changes to either supply or demand. Near-zero [interest rates helped create the real estate bubble that sparked the Great Recession when it crashed](https://www.youtube.com/watch?v=LMo9mD8j7IA&t=91s) Because deflation distorts the value of money, deflation is particularly harmful for borrowers. Low interest rates made it easy for businesses and everyday people to take on enormous debt, which exacerbated the effects of the recession.

Economists define deflation as a sustained decline in prices across an economy

Deflationary periods are characterized by broad, significant price declines. The Federal Reserve can monitor deflation by tracking prices through price indexes, such as the Consumer Price Index (CPI), which characterizes the average costs for consumers each month.

Disinflation, a decrease in the rate of inflation, is different from deflation

Disinflation happens when prices are still going up, just at a slower rate. Prolonged disinflation is also often accompanied by a recession, making it painful for consumers.

The psychological aspect of deflation makes it difficult for policymakers to stabilize the economy

That psychological aspect is referred to as "the deflationary spiral." When prices start decreasing, people tend to hold on to their money to pay the lowest prices. But as prices start stabilizing, people resist increasing prices. (Some users may experience a paywall.)

The world's most famous case of deflation happened after Black Thursday

While the details are not fully agreed upon, many economists point to the Federal Reserve's tightening of the money supply as a prime culprit, leading to a significant deflationary spiral.

COVID-19's shock to employment rates sparked some economists to fear deflation

COVID-19 simultaneously disrupted the supply chain and the labor market. Since the unemployment rate had hit record highs, some economists were worried that the supply chain would recover before the labor market. If that had happened, businesses would have been producing goods, but no one would have been able to buy them because they wouldn't have the disposable income to do so.

China had an inflation rate of -0.4% in August 2025

As opposed to other G20 countries that are largely struggling with high inflation rates, China is facing deflation. Sluggish growth in the country's once booming real estate market is just one glimpse into the consumer slowdown triggering deflation.

Inflation was a word before deflation was

The word inflation has Latin roots and technically means an influx of air, first appearing in the English language in the 1890s to describe bike tires. Deflation's first known mention in an economic text was in 1919.

Why there's a snack recession

Inflation and economic uncertainty have driven many Americans to make cuts to their snack budgets, according to reports from major food manufacturers like General Mills, JM Smucker, and Campbell's. Major retailers have also observed lower-income consumers cutting back on nonessentials due to the macroeconomic environment.

Read former Fed chair Ben Bernanke's 2002 speech about preventing deflation

Very low inflation rates in the early 2000s in the United States and a worsening recession in Japan sparked some domestic concern over the threat of deflation. While Bernanke wasn't Chair at the time of the speech, he emphasized the Fed's role in preventing deflation.

Artificial intelligence might make companies too efficient—which could trigger deflation

AI innovation will likely decrease costs for companies and lead to a large increase in supply. That dramatic increase could conceivably bring prices down but keep supply high. However, AI's real impact will likely be complicated by its impact on human labor and the cost of new technology.

What something costs is reflective of a balance in the market determined by the amount of demand relative to the supply of goods and services

Because economies are complex systems, a wide variety of issues influence this balance—including some things generally considered to be positive, like rising wages.

Fracking has led to an increased global oil supply, contributing to lower oil prices

Fracking technology has significantly increased how much crude oil the US produces. As more countries adopt fracking technology, there could be an increased downward pressure on prices—although fracking has been widely criticized for its negative environmental impacts.

Switzerland's currency is so strong that it could cause deflation

Economic instability in the United States in 2025 strongly benefited Switzerland, where the value of the franc relative to the dollar increased by about 12.7%. In response, the price of imports dramatically decreased, making goods overall much cheaper.

Japan's 1990s deflation followed the country's fastest growth period

The end of World War II ended Japan's isolation in the global economy, prompting what's now called the "Japanese Economic Miracle." From the 1940s to the 1980s, Japanese policy makers enacted ultra-loose monetary policies that pushed a ton of cash into the market and fueled rapid growth. But these policies ultimately helped create a bubble and sent the country into a deep period of deflation.

Recessions are considered to be inevitable by modern economic standards

Recessions are caused by imbalances in the market and are guaranteed to happen in capitalist systems, but predicting them is a complex task.

Why private credit has faced challenges in recent years

The factors that some experts say are driving what could be private credit's most challenging era since the 2008 financial crisis include global economic uncertainty around trade and tariffs, investor fears about the amount of money being spent on artificial intelligence, and more.

A 'debt trap' refers to the need for loans or credit to cover the expenses incurred from other debt

Debt traps can be caused by unforeseen expenses or inadequate savings and can be a brutal cycle to break. At the end of 2025, total household debt in the US reached $18.8T, according to data from the Federal Reserve of New York.

Marriage rates are declining, especially in the richest countries

89% of the world’s population now live in countries with falling rates. Increasing costs of living, the financial burden of starting a family, and the rise of secularism are some of the key factors reducing marriage rates among the less affluent.

North American department store retail groups report sales declined from 2018 to 2023

That's according to a recent report from Bain & Company that dives into consumer sentiment around department store shopping and explores a potential reset for the industry.

Dollar stores procure their merchandise in bulk to help cut costs

In order to keep prices cheap, dollar stores source this merchandise from a variety of places, including liquidation sales (an event that happens when retailers need to sell off inventory quickly), directly from distributors, foreign markets, and more.

Globalization is increasing the demand for cheese

The increased popularity of Western cuisine has affected the cheese market in historically cheese-averse regions like East Asia. Japan has gotten particularly excited about exploring what cheese has to offer, with festivals and creative fusion dishes featuring the versatile ingredient.

Credit limits can be lowered as well as increased

Some common reasons for someone's credit limit being lowered include missed payments, an inactive account, and more.

Pros and cons of minimum wage

The federal minimum wage hasn’t been raised since 2009. Over the past decade or so, proponents of significantly raising the minimum wage have argued that doing so could reduce reliance on government financial assistance programs and increase consumer spending. But opponents say higher labor costs could lead to job cuts.

From 1991 to 2024, lithium-ion battery cell prices have fallen by 99%

The decrease from about $10,000 to $50 per kilowatt-hour has been driven by innovations in battery chemistry, improvements in manufacturing and supply chains, and increases in global cumulative production, which have caused average price declines of 19% each time it has doubled.

US consumers collectively owe more than $1T to credit card companies—almost as much as they owe in auto loans.

The price of gas is a composite made up of several different factors, with the federal gas tax making up less than 20% of what drivers pay at the pump.

Volcanic activity may have triggered the Black Death by spewing gases that led to crop failures in Europe, thus forcing the import of grain ships with plague-infested fleas.

Some renewable energy sources may weaken the resiliency of electric grids by removing outage buffers provided by coal- and natural gas-fired plants, which provide the system with more time to find a new power source if a plant goes down.

The boiling temperature of water decreases with increasing elevation because the molecules need less energy to overcome the lower atmospheric pressure associated with thinner air.

While El Niño moves warm Pacific Ocean waters east along the equator, La Niña moves them west, shifting where rainfall will become more common for months.

Netflix profits when you're not watching, and its movies are designed that way—read a detail-rich critical essay exposing lesser-known Netflix takes

To reduce wrinkles in clothing, research recommends gentle wash cycles with more water and tumble drying with smaller loads and longer times.

About 2,000 US babies are born annually without some portion of their limbs, potentially leading to a lifetime of pricey prosthetics.

'Silent' fireworks have gained more interest in recent years as a quieter celebratory option.

Alzheimer's can lead to brain shrinkage, with an average of around 2% of volume reduction per year

An investigation suggests a Scottish island became awash in forever chemicals via seafoam and seaspray—raising questions about what that means for the safety of other coastal areas.

When a Paris department store hesitated to sell Estée Lauder's perfume, she 'accidentally' broke a bottle, causing the smell to spread throughout the store and shoppers to start asking to buy the scent.

In 2026, Finland was named the world's happiest country for the ninth consecutive year based on its wealth, social safety network, and high life expectancy, among other factors.

Some coin denominations have ridges etched on their sides, partly to prevent counterfeiting, in a practice called 'reeding.'

Frank Lloyd Wright's houses are historically hard to sell because they're old, subject to local landmark commissions, and often unfashionable

Domino's Pizza's 30-minute delivery guarantee was responsible for the chain's 1980s surge, but it was discontinued after the company was found liable for delivery driver accidents.

In recent years a child anxiety expert has created and tested a novel phobia and anxiety treatment approach for children, focused on changing how parents respond to the fears.

Shooting stars, or meteors, are fragments of asteroids and comets that burn up as they enter Earth's atmosphere, creating streaks in the sky called meteor showers.

Warren Buffett's former professor Benjamin Graham is known as the 'father of value investing,' a strategy in which investors seek to buy stocks trading below their intrinsic worth.

In 1945, Surrealist artist Salvador Dalí and legendary animator Walt Disney began collaborating on a short film that was not completed until 2003, years after both men had died.

The Beatles' US label rejected the band's first two singles, 'Please Please Me' and 'From Me to You,' with one executive calling the band 'dead in the water.'

Art theft is the third-largest source of criminal revenues worldwide, thanks in part to the subjective nature of valuing a work of art.

For centuries, Niagara Falls has been a magnet for daredevils seeking to conquer one of nature's most powerful wonders, with its 200-foot drop and water rushing at 32 feet per second with 280 tons of force.

According to the physics of black holes, our 4D reality may be a hologram—a projection of information coded on a 2D surface on the edge of the universe.