Deflation: CNBC Explains

If you understand inflation, deflation is simply the flip side of the coin. In fact, sometimes it referred to as “negative inflation.” Like inflation, deflation is determined in relationship to a basket of goods and services. What is deflation? How is it measured? Salman Khan of the Khan Academy explains in a simplified example.

From this video, you’ll understand:

  • How to understand deflation over time
  • Why policymakers strive to avoid deflation