Economic occurrence where the inflation rate is negative and continuing to decrease. This occurs when prices and wages drop and slows inflation due to lower demand (and therefore, lower production). When this happens, the supply of money usually decreases, leading to a stronger currency which would fuel even lower prices and wages, thereby creating a chain of events. Deflationary spirals are often viewed negatively because they generally occur in recessionary times and tend to worsen the recession.
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Jun 12, 2012 ... Deflationary spiral is an economic argument that proposes that runaway deflation can eventually lead to the collapse of the currency given ...
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Jul 25, 2011 ... Learn more: http://www.khanacademy.org/video?v=snX4Wf7PGts Basics of a deflationary spiral.
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Definition of deflationary spiral: Economic occurrence where the inflation rate is negative and continuing to decrease. This occurs when prices and wages drop ...
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Noun, 1. deflationary spiral - an episode of deflation in which prices and wages decrease at an increasing rate and currency gains in value. spiral - a ...