Economy
Deflation
Definition
A sustained decrease in the general price level — the opposite of inflation. Prices fall, often accompanied by falling wages and economic stagnation.
Explanation
Japan experienced deflation from the late 1990s to 2010s, creating a "lost decades" of stagnant growth. Deflation is dangerous because consumers delay purchases (expecting lower prices tomorrow), debtors face rising real debt burdens, and monetary policy hits the "zero lower bound" (can't cut rates below zero). Central banks fear deflation more than moderate inflation.