Deflation is a bad thing for the economy of a nation. In the short term deflation is good for consumers as the prices of goods and services will fall down. In the long run, the production of goods and services will fall down as the revenues and profits of the organisations will be less due to fall in prices. It will lead to laying off workers, increase unemployment and the overall economy will be severely impacted. You can read about the Inflation in Economy- Types of Inflation, Inflation Remedies [UPSC Notes] in the given link.

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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