deflation

Examples of deflation in the following topics:

• The GDP Deflator

  • The GDP deflator is a price index that measures inflation or deflation in an economy by calculating a ratio of nominal GDP to real GDP.
  • The GDP deflator (implicit price deflator for GDP) is a measure of the level of prices of all new, domestically produced, final goods and services in an economy.
  • In the U.S., GDP and GDP deflator are calculated by the U.S.
  • Like the Consumer Price Index (CPI), the GDP deflator is a measure of price inflation/deflation with respect to a specific base year.
  • The GDP deflator measures price inflation in an economy.

• Deflation

  • Deflation is a decrease in the general price levels of goods and services.
  • Deflation is a decrease in the general price levels of goods and services.
  • And if there is deflation, $105 next year buys more than $105 does today.
  • Thus, deflation discourages borrowing, and by extension, consumption and investment today.
  • There are several theories about the causes of deflation.

• Deflation

  • Deflation is a decrease in the general price level of goods and services and occurs when the inflation rate falls below 0%.
  • In economics, deflation is a decrease in the general price level of goods and services.
  • Economists generally believe that deflation is a problem in a modern economy because they believe it may lead to a deflationary spiral .
  • But any of these may occur separately without deflation.
  • Annual inflation (in blue) and deflation (in green) rates in the United States from 1666 to 2004

• Limitations of Monetary Policy

  • Limitations of monetary policy include liquidity traps, deflation, and being canceled out by other factors.
  • Deflation is a decrease in the general price level of goods and services.
  • Deflation occurs when the inflation rate falls below 0%.
  • Inflation reduces the real value of money over time; conversely, deflation increases the real value of money.
  • If monetary policy is too contractionary for too long, deflation could set in.

• Defining and Calculating CPI

  • The GDP deflator is a measure of the level of prices of all new, domestically produced, final goods and services in an economy.
  • Unlike the CPI, the GDP deflator is a measure of price inflation or deflation for a specific base year.
  • The GDP deflator differs from the CPI because it is not based on a fixed basket of goods and services.
  • The GDP deflator "basket" changes from year to year depending on people's consumption and investment patterns.
  • Unlike the CPI, the GDP deflator is not impacted by substitution biases.

• Macroeconomics

  • Typically, aggregate levels of employment, economic growth, general levels of prices (inflation/deflation), and business fluctuations are examples of topics in macroeconomics.

• Disinflation

  • Disinflation is not to be confused with deflation, which is a decrease in the general price level.
  • To illustrate the differences between inflation, deflation, and disinflation, consider the following example.
  • This is an example of deflation; the price rise of previous years has reversed itself.

• Factors Affecting Pulmonary Ventilation: Compliance of the Lungs

  • Low lung compliance is commonly seen in people with restrictive lung diseases, such as pulmonary fibrosis, in which scar tissue deposits in the lung making it much more difficult for the lungs to expand and deflate, and gas exchange is impaired.
  • Exhalation of air also becomes much more difficult because the loss of elastic recoil reduces the passive ability of the lungs to deflate during exhalation.
  • Pulmonary fibrosis stiffens the lungs through deposits of scar tissue, decreasing low compliance and making it more difficult for the lungs to inflate and deflate.

• Introduction to IFRS

  • Current Cost Accounting, under Physical Capital Maintenance at all levels of inflation and deflation under the Historical Cost paradigm as well as the Capital Maintenance in Units of Constant Purchasing Power paradigm
  • Financial capital maintenance in nominal monetary units, i.e., globally implemented Historical cost accounting during low inflation and deflation only under the traditional Historical Cost paradigm
  • Financial capital maintenance in units of constant purchasing power, i.e., Constant Item Purchasing Power Accounting – CIPPA – in terms of a Daily Consumer Price Index or daily rate at all levels of inflation and deflation under the Capital Maintenance in Units of Constant Purchasing Power paradigm and Constant Purchasing Power Accounting – CPPA – during hyperinflation under the Historical Cost paradigm.
  • Units of constant purchasing power: capital maintenance in units of constant purchasing power at all levels of inflation and deflation in terms of a Daily Consumer Price Index or daily rate only under the Capital Maintenance in Units of Constant Purchasing Power paradigm.

• Macroeconomic Factors Influencing the Interest Rate

  • ., the federal fund rates in the United States), πt is the rate of inflation as measured by the GDP deflator, π*t is the desired rate of inflation, r*t is the assumed equilibrium real interest rate, yt is the logarithm of real GDP, and y*t is the logarithm of potential output, as determined by a linear trend.
  • If this calculation yields a positive number, it is called an "inflationary gap" and indicates the growth of aggregate demand is outpacing the growth of aggregate supply (or high level of employment), possibly creating inflation, signaling an increase in interest rates made by the Central Bank; if the calculation yields a negative number it is called a "recessionary gap," which is accompanied by a low employment rate, possibly signifying deflation and a reduction in interest rates.