What does deflation mean?

Deflation is a decrease in the GENERAL price level. Prices of individual goods move up and down all the time. Show more... I often face the situation that I can't find a good which was sold 6 month ago, especially about the computers and the smartphones etc.. In that case, it's supposed that I can't compare the previous price with current one.

What is the difference between deflation and disinflation?

Deflation is a sustained decrease in the price level of goods and services, while disinflation is a decrease in the rate of inflation. Deflation is the decline in the price level of goods and services associated with a contraction in the supply of money and credit. The money supply is influenced by central banks.

What happens during deflation?

During deflation, the purchasing power of currency rises over time. Deflation is the general decline in the price level of goods and services. It is usually associated with a contraction in the supply of money and credit, but prices can also fall due to increased productivity and technological improvements.