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  1. Home
  2. /Glossary
  3. /Deflation
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macro

Deflation

When prices across the economy decline over time, increasing money's purchasing power.

Definition

When prices across the economy decline over time, increasing money's purchasing power. While it sounds good, deflation can be dangerous because people delay purchases expecting lower prices, which hurts the economy. Central banks fear deflation more than inflation.

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GuideTokenomics Guide

Related Terms

Inflation

The rate at which prices rise and money loses purchasing power.

Monetary Policy

How central banks manage money supply and interest rates to influence the economy.

Recession

An economic downturn typically defined as two consecutive quarters of declining GDP.

Basis Point

One hundredth of a percentage point (0.

Bitcoin Treasury Strategy

A corporate strategy of using company treasury funds and debt to buy Bitcoin, popularized by MicroStrategy's Michael Saylor.

CBDC (Central Bank Digital Currency)

A digital form of a country's official currency issued and controlled by its central bank.

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