Disinflation

Under a disinflation is defined as a reduction in the price level increases, which means the rate of price increases decreases. Disinflation therefore not referred to a reduction in inflation, but a fall in the price level ( deflation). Disinflation aims to reduce the rate of inflation in an economy. According to the concept of the Phillips curve a Disinflationsstrategie leads to a reduction in real gross domestic product.

Example: Disinflation basis of the inflation target of the European Central Bank

The Governing Council expects that price stability is ensured when the annual inflation below but close to 2%, although - to that extent the related objective of monetary policy is geared to meet the level of the target rate. In 2013 it was not possible the ECB rate in the EU area to keep: the annual average rose in the euro zone consumer prices increased by 1.4% (EU: 1.5%). In declining inflation is disinflation, not deflation to, but the situation is unstable, the ECB announced in November 2013.