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To differ with Barrons, I have always defined deflation (as does my
Webster albeit old) as a contraction in the volume of money or credit.
The defining of inflation and deflation in terms of the price of goods
is a result of many years of government subterfuge (doublespeak)
resulting in common public misuse of the terms. Just stirring the
brew. Rgds, Terry
Stewart Taylor wrote:
> Someone else weigh in here, particularly if I am off base (as I frequently
> am).
>
> I'm not sure how the dictionary defines disinflation and deflation.
> Frankly I have to admit that I have never looked. Working in the industry
> and having always had an emphasis on the fixed-income markets I have always
> used the definition that I presented earlier.... As far as I can tell...
> most of the street (at least those portions of it that I had regular
> contact with) consider it to be disinflation when the overall inflation
> rate is above 0 (and falling)and deflation when the overall inflation rate
> is below 0 (and falling).
>
> Does anyone else have some input? Have I spent years using the wrong
> definition? Help me....
>
> Stewart.
>
> At 03:49 PM 12/10/98 -0500, Val Clancy wrote:
> >Dictionary of Financial Terms, 3rd edition by Barrons
> >Deflation: decline in prices of good and services;
> >not to be confused with disinflation which is slowing down in
> >the rate of price increases.
> >So if the prices are going up but the rate of that
> >is decreasing - disinflation.
> >
> >Disinflation:
> >Price: 20, 30, 39 ,47, 54, 60, 65, 69, 72, 74, 75 -
> >Rate: 10, 9, 8, 7, 6, 5, 4, 3, 2, 1
> >
> >Deflation:
> >Price: 75, 74, 73....70
> >Rate: does not matter.
> >Val.
> >
> >Roger Fortier wrote:
> >
> >> Anyone care to tell me what is the difference between deflation and
> >> disinflation? I thought these were the same but I often hear people talk
> >> about them as if they were seperate.
> >
> >
> >
> >
> Stewart Taylor
> Taylor Fixed Income Outlook
> Voice: 501-219-9774
> Fax: 501-228-0963
> E-Mail: staylor@xxxxxxx
> Web Site: http://www.cei.net/~staylor/
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