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What is disinflation? What is its economic significance?

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What is disinflation? What is its economic significance?
posted Aug 30, 2017 by Rani Das

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Disinflation is a situation of decrease in the rate of inflation over successive time period. It is simply slowing of inflation. Here, the inflation rates for successive periods are taken and we find that inflation rate decreases steadily over these different time periods.

For example, consider the CPI inflation rate in India for June, July, August, September and October. If the inflation rate is, 8.2%, 7.5%, 6.4%, 6.1% and 5.9% respectively, we can observe that the rate of inflation is decreasing. This is the situation of disinflation. Disinflation can be measured over different time periods and not during one time period.

answer Sep 2, 2017 by Mukul Chag
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