| EH.Net Encyclopedia: Deflation (2814 words) |
 | Deflation is a persistent fall in some generally followed aggregate indicator of price movements, such as the consumer price index or the GDP deflator. |
| Hence, a deflation is a harbinger of a financial crisis with repercussions for the economy as a whole. |
| Unfortunately, the prevailing ideology was that deflation was a purgative of sorts, that is, the price to be paid for economic excesses during the boom years, and necessary to establish to conditions for economic recovery. |
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