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Someone else weigh in here, particularly if I am off base (as I frequently
am).
I'm not sure how the dictionary defines disinflation and deflation.
Frankly I have to admit that I have never looked. Working in the industry
and having always had an emphasis on the fixed-income markets I have always
used the definition that I presented earlier.... As far as I can tell...
most of the street (at least those portions of it that I had regular
contact with) consider it to be disinflation when the overall inflation
rate is above 0 (and falling)and deflation when the overall inflation rate
is below 0 (and falling).
Does anyone else have some input? Have I spent years using the wrong
definition? Help me....
Stewart.
At 03:49 PM 12/10/98 -0500, Val Clancy wrote:
>Dictionary of Financial Terms, 3rd edition by Barrons
>Deflation: decline in prices of good and services;
>not to be confused with disinflation which is slowing down in
>the rate of price increases.
>So if the prices are going up but the rate of that
>is decreasing - disinflation.
>
>Disinflation:
>Price: 20, 30, 39 ,47, 54, 60, 65, 69, 72, 74, 75 -
>Rate: 10, 9, 8, 7, 6, 5, 4, 3, 2, 1
>
>Deflation:
>Price: 75, 74, 73....70
>Rate: does not matter.
>Val.
>
>Roger Fortier wrote:
>
>> Anyone care to tell me what is the difference between deflation and
>> disinflation? I thought these were the same but I often hear people talk
>> about them as if they were seperate.
>
>
>
>
Stewart Taylor
Taylor Fixed Income Outlook
Voice: 501-219-9774
Fax: 501-228-0963
E-Mail: staylor@xxxxxxx
Web Site: http://www.cei.net/~staylor/
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