Deflation is the opposite of inflation. It causes a decrease in the price of goods and services in a country. This in turn, helps consumers buy more than what they could before, with the same amount of money.
So is deflation a good phenomenon? Absolutely not. One of the major problems caused by deflation is that it always leads to lesser demand for goods and services. So naturally, their production also goes down. With this, many people lose their jobs or their salaries get cut. This in turn badly affects the economy of that nation.
Again, what is the use in having lots of money but not enough goods to purchase? So, when prices fall in deflation, it does not help people at all. Deflation occurs when the government reduces its expenditure or when the citizens start spending less. However, it is not as common as inflation.
