Describe the processes of deflation

Deflation is a gain in the purchasing power of money, which results in a lasting fall in the general price level. This phenomenon should not be confused with disinflation, which is a slowdown in inflation, that is, a decrease in the rate of inflation.

Deflation is not a negative symmetry of inflation, because the processes and consequences it entails are different. The latter takes three forms: monetary (reduction of means of payment in circulation), financial (contraction of credit), and real (reduction of production). Deflation is a normal consequence of changes in economic structures when markets are saturated or as a result of innovations that allow productivity gains.

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