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Deflation - When everything becomes cheaper!

January 13, 2015

Everybody knows what inflation means: prices go up, and your money is worth less. Deflation is the mirror image: everything becomes cheaper, with less money in circulation. Consumers and investors then start to hold back in anticipation.

https://p.dw.com/p/1EJif

December 2014 saw prices in the euro zone drop for the first time in more than five years - a total of 0.2 percent compared to the previous year. That happened even though the European Central Bank has tried for months to prevent deflation. Made in Germany explains how deflation arises, and why it can be so dangerous.