What is the meaning of reflation?

Reflation is an act of stimulating the economy by reducing taxes or by increasing the money supply. To curb the effects of deflation, a monetary or fiscal policy is designed by the Government or Central Bank to stimulate spending and expand output. This is known as reflation. You can read about the Inflation in Economy- Types of Inflation, Inflation Remedies [UPSC Notes] in the given link.

It could involve investing in large infrastructure projects, and reducing interest rates.

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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