When policymakers at the Federal Reserve voted to slash interest rates at their Oct. 28-29 meeting, it's a good bet the threat of deflation played a role in the decision. That concern is bound to get more attention in coming months as inflation begins to fall amid a progressively weaker economy and the financial crisis. Deflation is an economic disease caused by a sustained drop in overall demand and falling prices that forces businesses to cut prices ever deeper. It was last seen in the U.S. in the 1930s and in Japan in the 1990s, when the inflation rate fell to zero and then turned negative for several years.
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