Deflationary spiral meaning. Whether deflationary spirals can actually occur is controversial. Another related idea is irving fishers theory that excess debt can cause a continuing deflation. Economic occurrence where the inflation rate is negative and continuing to decrease.
Deflationary spiral definition see under spiraldef 7. This occurs when prices and wages drop and slows inflation due to lower demand and therefore lower production. A situation in which prices increase then people are paid more in their jobs which then causes.
In a last gasp effort to prevent an already depressed european economy from tumbling into an deflationary spiral the european central bank today announced a 11 trillion euroor roughly 13. A deflationary spiral is a downward price reaction to an economic crisis leading to lower production lower wages decreased demand and still lower prices. 1 krugman caught my notice for being one guy with a really nervy suggestion on how japan could get out of its deflationary spiral.