Reflation

Under reflation is meant an aggressively focused on avoiding deflation economic policy. Here, the state ranks all economic policy constraints (such as balanced budget, inflation risk, etc. ) the avoidance of general, ongoing price declines below.

Reflation can be done either by the interaction of an expansionary monetary policy and an expansionary fiscal policy ( ie lower interest rates associated with higher government spending ) or simply by expansionary monetary policy. Reason for an uncompromising Reflationspolitik is mostly the fear of a deflationary spiral.