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

'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.

Falling demand and lower costs of production cause deflation

"Falling demand" refers to anything that changes someone's willingness to spend money on goods and services. Global recessions, fears of a worldwide recession, and a fall in the money supply are all factors that could lead to falling demand. Likewise, lower production costs allow companies to increase production, which can lead to a surplus in supply.

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 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.

Technological advancements are historically deflationary

Technological innovation can drive down costs and prices for businesses, which can increase real wages for employees. As a result, people have more money to spend and demand increases.

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.

Prices can still feel high even if inflation is slowing

This is partly because a recent spike in inflation raised prices permanently, so even though the pace of price growth has slowed, prices have still gone up for good.

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.

Inflation explained in under 3 minutes

Keep seeing inflation in the news, but don't have a great grasp on what it means or how it works? This overview from 1440 breaks down how economists think about inflation, what it means for the average consumer, and how governments attempt to keep rising prices in check through various policies.

Roughly $5T of stimulus money flooded the economy during the pandemic

Recessions can last anywhere from months to years. To encourage economic growth, governments use policy levers such as lowering interest rates or introducing a stimulus. Economists credit massive stimulus funds for helping the economy quickly recover from a recession during the COVID-19 pandemic.

Negative thinking spirals are often the result of uncertainty and anxiety

Psychologists suggest that a helpful way to deal with negative thinking is to remind oneself that setbacks can simply be setbacks, rather than a grand catastrophe. Positive self-talk, focusing on the factors we can control, and being altruistic are other tools that can help one escape negative thinking.

Addressing psychological barriers to building wealth

Almost half of adults in the US report owning no investable assets. For many, the barrier to entry is the belief that investing is too complex for them to get involved. Consulting with a financial psychologist, this article addresses the cognitive bias that causes so many people to miss out on financial opportunities, and offers tips on how to get past the anxieties and just begin.

Read about why bans on short selling are a controversial policy

Generally, short selling is legal, but regulations often restrict short positions when a stock has experienced a sharp price decline (more than 10% in one day). However, negative feedback loops in times of financial crisis have given short selling a bad reputation. The government has temporarily banned short selling during previous market downturns—like The Great Recession of 2008 and the early months of the COVID-19 pandemic—but experts argue whether those bans actually improved market stability or just distorted prices.

The lipstick index is just one niche so-called 'recession indicator'

When consumers think an economic downturn is looming, the "lipstick index" economic theory argues that sales of more affordable luxury items (such as lipstick) go up. Other weird alleged recession indicators include Former Federal Reserve Chair Alan Greenspan's suggestion that men's underwear sales could help predict an economic downturn.

Regular coupon users pay less attention to the actual price of what they’re buying

The psychology of coupon users can feel counterintuitive: Research suggests regular coupon users actually prioritize coupon availability over actual price comparisons.

How chaos helps explain why small market corrections can produce major economic instability

Oxford University complex systems professor Doyne Farmer discusses how predictions from many economic models are overly weighted toward simple relationships, such as supply and demand, and external shocks, such as the COVID-19 pandemic. However, real-world macroeconomic systems involve public and private actors interacting, producing feedback loops and cascading effects that resemble the oscillatory behavior seen in chaotic systems.

Explore the complex trade-offs policymakers face when considering tariffs

While tariffs can generate government revenue and encourage the consumption of locally produced goods, they can often lead to higher consumer prices and may negatively impact economic growth.

BNPL may be adding a layer of debt that doesn't show up in economic data

Given somewhat limited regulation in the BNPL space, data about its usage is limited—many BNPL firms have resisted sharing information about user purchases, finances, and more thus far. As more people begin using buy now, pay later services, experts are concerned about whether BNPL is adding a new layer of "hidden leverage" to the economy.

The dollar’s value stems from public trust and demand

In simple terms, a dollar bill’s value relies on two elements: that people believe it will be accepted in exchange for goods and services, and how much demand for the currency there is.

The US developed a coin circulation problem in 2020

As people reduced the frequency with which they paid for things in cash and change during the COVID-19 pandemic, opting for tap-to-pay systems or online shopping instead, the number of coins in circulation decreased. Those who did make cash purchases were more likely to keep their change at home rather than use it on a subsequent purchase.

Arguments for returning to a gold standard reappear from time to time

However, critics argue that globalization has made the gold standard impractical for modern economies, as it limits a nation’s ability to have a flexible monetary policy—hence, none of today's governments have a gold standard.

The depression paradox refers to a lack of energy to take action to help alleviate it

Activities like exercise, even at low levels, have been shown to alleviate some of depression's symptoms for some people. However, depression saps energy levels, making it particularly difficult to motivate oneself to take helpful action.

'Buying the dip' refers to purchasing stocks or ETFs after a price decline in anticipation of a rebound

Some investors see it as getting a discount before the market recovers and the temporary declines turn into gains.

Defiance is choosing to act in line with your values under pressure

Compliance often arises from insinuation anxiety and social pressure, making defiance critical in protecting personal integrity and, in turn, strengthening institutions. Practicing defiance may be achieved through the Defiance Compass framework and can lead to a more values-driven society.

About 12.5% of US adults experience a phobia in their lifetime, a diagnosis that hinges on the intense fear interfering with daily life and persisting for at least six months.

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.

US housing costs have risen by roughly 175% between 1991 and 2026—but a growing number of Gen Zers are becoming homeowners anyway. In 2025, 4% of homebuyers were Gen Z, up from 3% the year before.

How Amazon operates a 'flywheel' business model, a self-reinforcing cycle that drives continuous growth

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

Hedge funds, the private investment firms that trade a wide swath of financial assets, make money by imposing steep fees on investors and from the fund's investment performance.

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

Chaos theory—informally known as the butterfly effect—is the reason why weather forecasts are presented with probabilities rather than certainties.

Use this calculator to find the dollar value of your mental load, from meal planning to coordinating after-school care for your children.

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

Up to a million Girl Scouts sell about 200 million cookie boxes every spring, generating $800 million, largely because refusing a child is frowned upon

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

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.

See a ranking of the best (and worst) Federal Reserve Chairs since 1914 out of the 16 men and women who have held the office since.

Play the role of a student in a game where you try to navigate college and remain debt-free, selecting different income levels, high school experience, race, ethnicity, and more.

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.

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.

Telehealth demand for GLP-1s for weight loss is booming as consumers seek easier access.

Existentialist writer Jean-Paul Sartre coined the famous phrase 'Hell is—other people' in his play 'No Exit'

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.

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

Explore fun facts from the USPS, including unique post office buildings, a stamp that traveled past Pluto, and more.

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

The tragic Pulitzer Prize-winning image 'The Vulture and the Little Girl' (1993) generated controversy, raised concerns about ethics in photography, and eventually led to the photographer's death.