Does deflation ever happen?

Yes, there are instances when the economic superpower, the United States of America had to face deflation. The most recent example of deflation in the USA was in 2007-2008, commonly known as the Great Recession. In the second half of the 20th century there was hardly any occurrences of deflation. You can read about the Inflation in Economy- Types of Inflation, Inflation Remedies [UPSC Notes] in the given link.

Deflation took place in the US between 1930 to 1933, commonly known as the Great Depression. Prior to it, the US witnessed deflation periods between 1865 to 1900 and even before that, deflationary periods were observed between 1817 and 1860.

Further readings:

  1. Inflation Targeting: Methods, Drawbacks and Benefits
  2. Consumer Price Index (CPI) – CPI and its Types [USPC Indian Economy Notes]

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