Hyperdeflation

Hyperdeflation

Hyperdeflation refers to a significant and rapid incidence of deflation in an economy or in asset prices. In economics, hyperdeflation will lead to a significant increase in purchasing power as the price of goods and services falls precipitously, creating serious economic effects as consumers and businesses stop purchasing as goods and services become cheaper. And just as inflation over time reduces debt burdens, hyperdeflation has the opposite effect: it drastically increases debt burdens. Deflationary tendencies are remedied through monetary actions by central banks. The bursting of asset-prices bubbles and dramatic declines in prices can be seen as a form of hyperdeflation.

logo-animationlogo-animationlogo-animation

Related terms