Deflation refers to a general decrease in prices across a range of goods and services. It is often associated with reduced levels of output, employment, and trade. Unlike controlled disinflation, deflation can have severe negative impacts on the economy.
Disinflation refers to a decrease in the rate of inflation – a slowdown in the rate at which prices are increasing across the economy. Unlike deflation, disinflation is characterized by a reduction in the inflation rate over time, without causing a drop in economic output or employment.
