Monday, December 8, 2014

Is There A Difference between Deflation And Disflation?

deflation vs disflationRecently, I chanced about a few mainstream articles mentioning about "Deflation" and "Disflation" in different context. Being a noob in Accounting/Financial terms, it puzzled me a  lot and I set to find out whether these two terms are talking about the same thing?
After a brief research via the mother of all search engine, GOOGLE, I am satisfied with my findings! They are quite close (in meaning) but not exactly the same thing i.e. the "Same same but different" kind of terms.
Of course, to some of you, this might be a elementary stuff but it is really something new to me and thought of sharing it out too ;-) 
Following are the definition that I've obtained (via various online sources) :
Inflation  - An increase in the overall price level (using either GDP [Gross Domestic Product] or CPI [Consumer Price Index] indicator) over a period of time.
Deflation - The exact opposite of Inflation i.e. A decrease in the overall price level (using either GDP [Gross Domestic Product] or CPI [Consumer Price Index] indicator) below the 0% zone (i.e. a negative inflation rate).
Disflation - Represents a period when the inflation rate is positive, but declining over time i.e. a slow-down in the inflation rate (i.e. still above the 0% zone)
I've also managed to extract an image illustrating the difference between Disflation and Deflation quite clearly, see below:

I've learnt something new today and hope you too!

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