Editing Deflation (section)

==Historical examples==

{{recentism|section=yes|reason=Examples are generally in reverse chronological order, while the case of the Spanish Empire among other highly notable ones isn't even mentioned. Rather egregious|date=December 2024}}

=== EU countries ===
The inflation rate of [[Greece]] was negative during three years from 2013 to 2015. The same applies to [[Bulgaria]], [[Cyprus]], [[Spain]], and [[Slovakia]] from 2014 to 2016. Greece, Cyprus, Spain, and Slovakia are members of the [[European monetary union]]. The Bulgarian currency, the [[Bulgarian lev|lev]], is [[currency peg|pegged]] to the [[Euro]] with a fixed exchange rate. In the entire [[European Union]] and the [[Eurozone]], a [[disinflation]]ary development was to be observed in the years 2011 to 2015.

{| class="wikitable" style="text-align:center"
|-
! Year !! Bulgaria !! Greece !! Cyprus !! Spain !! Slovakia !! EU !! Eurozone
|-
| 2011 || 3.4 || 3.1 || 3.5 || 3.0 || 4.1 || 3.1 || 2.7
|-
| 2012 || 2.4 || 1.0 || 3.1 || 2.4 || 3.7 || 2.6 || 2.5
|-
| 2013 || 0.4 || style="background: yellow;"| −0.9 || 0.4 || 1.5 || 1.5 || 1.5 || 1.4
|-
| 2014 || style="background: yellow;"| −1.6 || style="background: yellow;"| −1.4 || style="background: yellow;"| −0.3 || style="background: yellow;"| −0.2 || style="background: yellow;"| −0.1 || 0.6 || 0.4
|-
| 2015 || style="background: yellow;"| −1.1 || style="background: yellow;"| −1.1 || style="background: yellow;"| −1.5 || style="background: yellow;"| −0.6 || style="background: yellow;"| −0.3 || 0.1 || 0.2
|-
| 2016 ||  style="background: yellow;"| −1.3 || 0.0 || style="background: yellow;"| −1.2 ||style="background: yellow;"| −0.3 || style="background: yellow;"| −0.5 || 0.2 || 0.2
|-
| 2017 || 1.2 || 1.1 || 0.7 || 2.0 || 1.4 || 1.7 || 1.5
|}
Table: [[Harmonised index of consumer prices]]. Annual average rate of change (%) (HICP inflation rate).<ref>{{cite web |publisher=Eurostat|title=HICP - inflation rate |url=https://ec.europa.eu/eurostat/databrowser/view/tec00118/default/table?lang=en |access-date=8 February 2021}}</ref> Negative values are highlighted in colour.

===Hong Kong===
Following the [[1997 Asian financial crisis]], [[Hong Kong]] experienced a long period of deflation which did not end until the fourth quarter of 2004.<ref>{{Cite web|url=http://www.info.gov.hk/censtatd/eng/hkstat/fas/cpi/cpi_adjust_index.html|archiveurl=https://web.archive.org/web/20050308003234/http://www.info.gov.hk/censtatd/eng/hkstat/fas/cpi/cpi_adjust_index.html|url-status=dead|title=Frequently asked Statistics - 1999/2000-based Seasonally Adjusted Consumer Price Indices|archivedate=March 8, 2005|website=www.info.gov.hk}}</ref>  Many [[East Asia]]n currencies devalued following the crisis. The [[Hong Kong dollar]], however, was pegged to the [[United States dollar|U.S. dollar]], leading to an adjustment instead by a deflation of [[consumer price index|consumer prices]]. The situation was worsened by the increasingly cheap exports from [[mainland China]], and "weak [[consumer confidence]]" in Hong Kong. This deflation was accompanied by an economic slump that was more severe and prolonged than those of the surrounding countries that devalued their currencies in the wake of the Asian financial crisis.<ref>{{Cite book|last=Jao|first=Y. C.|title=The Asian Financial Crisis and the Ordeal of Hong Kong |url=https://archive.org/details/asianfinancialcr00jaoy|url-access=limited|publisher=Quorum Books  |year=2001 |pages=[https://archive.org/details/asianfinancialcr00jaoy/page/n170 155]–170 |chapter=Why Was Hong Kong a Laggard in Economic Recovery |isbn=978-1-56720-447-6 }}</ref><ref>{{Cite news|url=http://www.atimes.com/atimes/China/EG04Ad04.html |archive-url=https://web.archive.org/web/20030708025924/http://www.atimes.com/atimes/China/EG04Ad04.html |url-status=unfit |archive-date=2003-07-08 |title=Why Hong Kong is in crisis|last=Liu |first=Henry C. K. |date=2003-07-04 |publisher=Asia Times |access-date=27 April 2010 }}</ref>

===Ireland===
In February 2009, [[Republic of Ireland|Ireland]]'s [[Central Statistics Office (Ireland)|Central Statistics Office]] announced that during January 2009, the country experienced deflation, with prices falling by 0.1% from the same time in 2008. This was the first time deflation has hit the Irish economy since 1960. Overall consumer prices decreased by 1.7% in the month.<ref>{{cite web|url=http://www.rte.ie/news/2009/0212/inflation.html|title=First annual negative inflation in 49 years|date=12 February 2009|work=RTE.ie}}</ref>

Brian Lenihan, Ireland's Minister for Finance, mentioned deflation in an interview with RTÉ Radio. According to RTÉ's account,<ref>[https://www.rte.ie/news/2009/1113/124186-budget2010/ Deflation a factor in Budget cuts - Lenihan] {{Webarchive|url=https://web.archive.org/web/20180903150802/https://www.rte.ie/news/2009/1113/124186-budget2010/ |date=2018-09-03 }}, ''RTE News'', 9 December 2009</ref> "Minister for Finance Brian Lenihan has said that deflation must be taken into account when Budget cuts in child benefit, public sector pay and professional fees are being considered. Mr Lenihan said month-on-month there has been a 6.6% decline in the cost of living this year."

This interview is notable in that the deflation referred to is not discernibly regarded negatively by the Minister in the interview. The Minister mentions the deflation as an item of data helpful to the arguments for a cut in certain benefits. The alleged economic harm caused by deflation is not alluded to or mentioned by this member of government. This is a notable example of deflation in the modern era being discussed by a senior financial Minister without any mention of how it might be avoided, or whether it should be.<ref>{{Cite web|url=http://www.rte.ie/news/2009/1113/budget.html|archiveurl=https://web.archive.org/web/20100226052533/http://www.rte.ie/news/2009/1113/budget.html|url-status=dead|title=''RTÉ News - Deflation a factor in Budget cuts - Lenihan''|website=[[RTÉ.ie]] |archivedate=February 26, 2010}}</ref>{{original research inline|date=April 2013}}

===Japan===
{{More citations needed section|date=September 2010}}

Deflation started in the early 1990s.<ref name="academia.edu"/> The [[Bank of Japan]] and the government tried to eliminate it by reducing interest rates and "[[quantitative easing]]," but did not create a sustained increase in broad money and deflation persisted. In July 2006, the zero-rate policy was ended.

Systemic reasons for deflation in Japan can be said to include:
* [[Money supply#Japan|Tight monetary conditions]]: The Bank of Japan kept monetary policy loose only when inflation was below zero, tightening whenever deflation ends.<ref>{{cite web|url=http://www.themoneyillusion.com/?p=7337 |title=Meet the new BOJ, same as the old BOJ |publisher=TheMoneyIllusion |date=2010-10-05 |access-date=2013-02-14}}</ref>
* [[Demographics of Japan|Unfavorable demographics]]: Japan has an aging population (22.6% over age 65) which has been declining since 2011, as the death rate exceeds the birth rate.<ref>{{Cite news|last=Dooley|first=Ben|date=2019-12-24|title=Japan Shrinks by 500,000 People as Births Fall to Lowest Number Since 1874 (Published 2019)|language=en-US|work=The New York Times|url=https://www.nytimes.com/2019/12/24/world/asia/japan-birthrate-shrink.html|access-date=2021-02-04|issn=0362-4331}}</ref><ref>{{Cite web|date=2019-06-06|title=Statistics Bureau Home Page/Population Estimates Monthly Report|url=http://www.stat.go.jp/english/data/jinsui/tsuki/index.html|archive-url=https://web.archive.org/web/20190606203315/http://www.stat.go.jp/english/data/jinsui/tsuki/index.html|url-status=dead|archive-date=2019-06-06|access-date=2021-02-04}}</ref>
* Fallen [[asset]] prices: In the case of Japan asset price deflation was a mean reversion or correction back to the price level that prevailed before the asset bubble. There was a rather large [[price bubble]] in [[stock]]s and especially [[real estate]] in Japan in the 1980s (peaking in late 1989).<ref>{{Cite web|last=Nielsen|first=Barry|title=The Lost Decade: Lessons From Japan's Real Estate Crisis|url=https://www.investopedia.com/articles/economics/08/japan-1990s-credit-crunch-liquidity-trap.asp|access-date=2021-02-04|website=Investopedia|language=en}}</ref><ref>{{Cite web|last=Post|first=The Blah|date=2019-11-17|title=Japanese Asset Price Bubble|url=https://medium.com/@swatisudhakaran/japanese-asset-price-bubble-48bc1639f666|access-date=2021-02-04|website=Medium|language=en}}</ref>
* Insolvent companies: Banks lent to companies and individuals that invested in real estate. When real estate values dropped, these loans could not be paid. The banks could try to collect on the collateral (land), but this wouldn't pay off the loan. Banks delayed that decision, hoping asset prices would improve. These delays were allowed by national banking regulators. Some banks made even more loans to these companies that are used to service the debt they already had. This continuing process is known as maintaining an "unrealized loss", and until the assets are completely revalued and/or sold off (and the loss realized), it will continue to be a deflationary force in the economy. Improving bankruptcy law, land transfer law, and tax law have been suggested as methods to speed this process and thus end the deflation.<ref>{{Cite web|last=Group|first=Global Legal|title=International Comparative Legal Guides|url=https://iclg.com/practice-areas/restructuring-and-insolvency-laws-and-regulations/japan|access-date=2021-02-04|website=International Comparative Legal Guides International Business Reports|language=en}}</ref><ref>{{Cite web|title=Practical Law UK Signon|url=https://signon.thomsonreuters.com/?productid=PLCUK&viewproductid=UKPL&lr=0&culture=en-GB&returnto=https%3a%2f%2fuk.practicallaw.thomsonreuters.com%2fCosi%2fSignOn%3fredirectId%3drt_a4870076-2703-4605-97ff-f08574fb3b5b&tracetoken=0204210942140CvCsgoHJiMwaBw39XiWjYkZf7BuLWKhdD4IKQLRqkuKTNqq0uY7L-SNnb6hW5HJa_sHPQSMcrBJvtle0FRWi-kHms5dRA6MV8ZxXPCuxInbgcBE3ulPDB2z7jH1JUsZlNV_soxJ41jUzrYlUcZ7KaQ8YvWfzC2AXiVHYTeGKljRk8Bf2NxoS7YZVRmexAcKyWC8dnsRYP0pDDfB_ChO0JlUZykNMghFRGv-ye4yf3PPTtEMKJEh8jgl_D3s0C1zCeYs8Sq4HgQxBjl5XvbbK0YqbM7cru3kAM6t9DMvOVqcwdqzT3rq99Oc8xou-BUuB_KnlWcGfZFt6jFLkw2cta7S9D9F-eUxOzifxbSqBOrMjeC5Eza68vFPFsUV1IvRG|access-date=2021-02-04|website=signon.thomsonreuters.com}}</ref><ref>{{Cite web|date=2021-01-13|title=Japan's 2020 corporate bankruptcies fall to 31-year low with government aid|url=https://www.japantimes.co.jp/news/2021/01/13/business/corporate-business/japans-2020-corporate-bankruptcies-fall-to-31-year-low-government-aid/|access-date=2021-02-04|website=The Japan Times|language=en-US}}</ref><ref>{{Cite news|date=2002-05-09|title=Prize possessions|newspaper=The Economist|url=https://www.economist.com/finance-and-economics/2002/05/09/prize-possessions|access-date=2021-02-04|issn=0013-0613}}</ref><ref>{{Cite news|date=2020-09-24|title=What to do about zombie firms|newspaper=The Economist|url=https://www.economist.com/leaders/2020/09/24/what-to-do-about-zombie-firms|access-date=2021-02-04|issn=0013-0613}}</ref>
* Insolvent banks: Banks with a larger percentage of their loans which are "non-performing", that is to say, they are not receiving payments on them, but have not yet written them off, cannot lend more money; they must increase their cash reserves to cover the bad loans.<ref>{{Cite web|title=Is the Bank of Japan Technically Insolvent? Dangers Involved in Long-Term Deterioration of BoJ Financial Position {{!}} Discuss Japan-Japan Foreign Policy Forum|url=https://www.japanpolicyforum.jp/economy/pt20180222185219.html|access-date=2021-02-04|website=www.japanpolicyforum.jp|archive-date=2021-02-09|archive-url=https://web.archive.org/web/20210209020705/https://www.japanpolicyforum.jp/economy/pt20180222185219.html|url-status=dead}}</ref><ref>{{Cite news|title=Nippon Credit Bank declared insolvent and nationalised|url=https://www.irishtimes.com/business/nippon-credit-bank-declared-insolvent-and-nationalised-1.225394|access-date=2021-02-04|newspaper=The Irish Times|language=en}}</ref>
* Fear of insolvent banks: Japanese people are afraid that banks will collapse so they prefer to buy (United States or Japanese) Treasury bonds instead of saving their money in a bank account. This likewise means the money is not available for lending and therefore economic growth. This means that the savings rate depresses consumption, but does not appear in the economy in an efficient form to spur new investment. People also save by owning real estate, further slowing growth, since it inflates land prices.{{dubious|reason=No reasoning given for how real estate prices slow growth, and this directly contradicts the paragraph above which pins deflation on falling real estate prices and banks hoping for some price increases before they realise their losses.|date=November 2017}}
* Imported deflation: Japan imports Chinese and other countries' inexpensive consumable goods (due to lower wages and fast growth in those countries) and inexpensive raw materials, many of which reached all time real price minimums in the early 2000s. Thus, prices of imported products are decreasing. Domestic producers must match these prices in order to remain competitive. This decreases prices for many things in the economy, and thus is deflationary.<ref>{{Cite web|last=|first=|date=|title=|url=https://www.frbsf.org/economic-research/files/wp08-29bk.pdf |archive-url=https://web.archive.org/web/20140308154019/http://www.frbsf.org/economic-research/files/wp08-29bk.pdf |archive-date=2014-03-08 |url-status=live|access-date=|website=}}</ref><ref>{{Cite web|title=New Japanese Import! Deflation|url=https://www.bullionvault.com/gold-news/deflation-japan-061720151|access-date=2021-02-04|website=www.bullionvault.com|language=en-US}}</ref>
* Stimulus spending: According to both Austrian and monetarist economic theory, Keynesian stimulus spending actually has a depressing effect. This is because the government is competing against private industry, and usurping private investment dollars.<ref>{{cite web|url=http://butnowyouknow.net/2009/07/15/why-stimulus-spending-depresses-the-economy/|title=Why Stimulus Spending Depresses the Economy|work=But Now You Know|date=16 July 2009}}</ref> In 1998, for example, Japan produced a stimulus package of more than 16 trillion yen, over half of it public works that would have a quashing effect on an equivalent amount of private, wealth-creating economic activity.<ref>{{cite web|url=https://mises.org/daily/1099|title=Explaining Japan's Recession, Benjamin Powell|work=Mises Institute|date=19 November 2002}}</ref> Overall, Japan's stimulus packages added up to over ''one hundred trillion'' yen, and yet they failed. According to these economic schools, that stimulus money actually perpetuated the problem it was intended to cure.<ref>{{Cite web|last=Ponciano|first=Jonathan|title=World Bank Warns Stimulus Spending And 'Dangerous' Debt Crisis Could Trigger Recession And Wipe Out A Decade Of Income Gains|url=https://www.forbes.com/sites/jonathanponciano/2021/01/05/world-bank-warns-stimulus-and-dangerous-debt-crisis-could-trigger-recession-and-wipe-out-a-decade-of-income-gains/|access-date=2021-02-04|website=Forbes|language=en}}</ref><ref>{{Cite web|last=Salsman|first=Richard|title=Japan's Three Decades of Depressive Stimulus Schemes – AIER|url=https://www.aier.org/article/japans-three-decades-of-depressive-stimulus-schemes/|access-date=2021-02-04|website=www.aier.org|date=3 June 2020 |language=en-US}}</ref>

In November 2009, Japan returned to deflation, according to ''[[The Wall Street Journal]]''. [[Bloomberg L.P.]] reports that consumer prices fell in October 2009 by a near-record 2.2%.<ref>{{cite web|url=https://www.bloomberg.com/apps/news?pid=newsarchive&sid=aKEgYWoMAWIc|title=Japan Releases Stimulus Package as Recovery Weakens (Update3)|website=[[Bloomberg News]]|date=16 August 2023 }}</ref> It was not until 2014 that new [[Abenomics|economic]] policies laid out by [[Prime Minister of Japan|Prime Minister]] [[Shinzo Abe]] finally allowed for significant levels of inflation to return.<ref>{{Cite news|date=2014-05-30|title=Japan inflation rate hits 23-year high|language=en-GB|work=BBC News|url=https://www.bbc.com/news/business-27615551|access-date=2021-02-04}}</ref> However, the [[COVID-19 recession]] once again led to deflation in 2020, with consumer good prices quickly falling, prompting heavy government stimulus worth over 20% of GDP.<ref>{{Cite web|date=2020-04-06|title=Abe unveils 'massive' coronavirus stimulus worth 20% of GDP|url=https://www.japantimes.co.jp/news/2020/04/06/business/shinzo-abe-japan-massive-coronavirus-stimulus/|access-date=2021-02-04|website=The Japan Times|language=en-US}}</ref><ref>{{Cite news|last=Kihara|first=Kaori Kaneko, Leika|date=2020-12-18|title=Japan's consumer prices fall at fastest pace in decade, stoke deflation fears|language=en|work=Reuters|url=https://www.reuters.com/article/us-japan-economy-inflation-idUKKBN28S05V|access-date=2021-02-04}}</ref><ref>{{Cite web|date=2020-05-01|title=Deflation fears reignited as pandemic hits consumer prices in Japan|url=https://www.japantimes.co.jp/news/2020/05/01/business/economy-business/deflation-pandemic-consumer-prices/|access-date=2021-02-04|website=The Japan Times|language=en-US}}</ref> As a result, it is likely that deflation will remain as a long-term economic issue for Japan.<ref>{{Cite web|last=FocusEconomics|title=Japan Inflation Rate (CPI) - Japan Economy Forecast & Outlook|url=https://www.focus-economics.com/country-indicator/japan/inflation|access-date=2021-02-04|website=FocusEconomics {{!}} Economic Forecasts from the World's Leading Economists|language=en}}</ref>

===United Kingdom===
During [[World War I]] the [[United Kingdom|British]] [[pound sterling]] was removed from the gold standard. The motivation for this policy change was to finance World War I; one of the results was inflation, and a rise in the gold price, along with the corresponding drop in international exchange rates for the pound. When the pound was returned to the gold standard after the war it was done on the basis of the pre-war gold price, which, since it was higher than equivalent price in gold, required prices to fall to realign with the higher target value of the pound.

The UK experienced deflation of approximately 10% in 1921, 14% in 1922, and 3 to 5% in the early 1930s.<ref>Bank of England Quarterly inflation report Feb 2009 p. 33 chart A</ref>

===United States===
[[Image:US Historical Inflation Ancient.svg|thumb|upright=1.8|right|Annual inflation (in blue) and deflation (in green) rates in the [[United States]] since 1666]]
[[Image:US Consumer Price Index Graph.svg|thumb|upright=1.8|right|[[United States Consumer Price Index|US CPI-U]] starting from 1913. Source: U.S. Department of Labor]]

====Major deflations in the United States====
There have been four significant periods of deflation in the United States.

The first and most severe was during the depression in 1818–1821 when prices of agricultural commodities declined by almost 50%. A credit contraction caused by a financial crisis in England drained specie out of the U.S. The Bank of the United States also contracted its lending. The price of agricultural commodities fell by almost 50% from the high in 1815 to the low in 1821, and did not recover until the late 1830s, although to a significantly lower price level. Most damaging was the price of cotton, the U.S.'s main export. Food crop prices, which had been high because of the famine of 1816 that was caused by the [[year without a summer]], fell after the return of normal harvests in 1818. Improved transportation, mainly from turnpikes, and to a minor extent the introduction of steamboats, significantly lowered transportation costs.<ref name="Taylor 1951">{{cite book |title=The Transportation Revolution, 1815–1860 |last=Taylor |first= George Rogers |year=1951 |publisher = Rinehart & Co. |location=New York |volume=IV |series=The Economic History of the United States |isbn= 978-0-87332-101-3 |pages=133, 331–334 |url=https://books.google.com/books?id=qjbLCQAAQBAJ&pg=PP1}}
</ref>

The second was the depression of the late 1830s to 1843, following the [[Panic of 1837]], when the currency in the United States contracted by about 34% with prices falling by 33%. The magnitude of this contraction is only matched by the Great Depression.<ref name="Atack1994">{{cite book |title      = A New Economic View of American History |last1 = Atack |first1 = Jeremy |last2 = Passell |first2 = Peter |year = 1994 |publisher = W.W. Norton and Co. |location = New York |isbn = 0-393-96315-2 |page = [https://archive.org/details/neweconomicviewo00atac/page/102 102] |url-access = registration |url = https://archive.org/details/neweconomicviewo00atac/page/102}}</ref> (See: {{section link|#Historical examples of credit deflation}}.) This "deflation" satisfies both definitions, that of a decrease in prices and a decrease in the available quantity of money. Despite the deflation and depression, GDP rose 16% from 1839 to 1843.<ref name="Atack1994"/>

The third was after the [[United States Civil War|Civil War]], sometimes called [[The Great Deflation]]. It was possibly spurred by return to a gold standard, retiring paper money printed during the Civil War:

{{blockquote|The Great Sag of 1873–96 could be near the top of the list. Its scope was global. It featured cost-cutting and productivity-enhancing technologies. It flummoxed the experts with its persistence, and it resisted attempts by politicians to understand it, let alone reverse it. It delivered a generation's worth of rising bond prices, as well as the usual losses to unwary creditors via defaults and early calls. Between 1875 and 1896, according to [[Milton Friedman]], prices fell in the United States by 1.7% a year, and in Britain by 0.8% a year. |source=''Grant's Interest Rate Observer'', 10 March 2006<ref>{{cite web |title=Inflation, ho! (a primer on deflation) |date=23 May 2003 |author=<!--Staff writer(s); no by-line--> |work=Grant's Interest Rate Observer |url=http://www.grantspub.com/articles/inflation/ |url-status=dead |archive-url=https://web.archive.org/web/20060228210300/http://www.grantspub.com/articles/inflation/ |archive-date=28 February 2006}}</ref>}}

(Note: [[David Ames Wells|David A. Wells]] (1890) gives an account of the period and discusses the great advances in productivity which Wells argues were the cause of the deflation. The productivity gains matched the deflation.<ref>{{cite book
|title=Recent Economic Changes and Their Effect on Production and Distribution of Wealth and Well-Being of Society
|last=Wells
|first=David A.
|year=1890 |publisher= D. Appleton and Co.|location= New York|isbn= 0-543-72474-3 |url= https://archive.org/details/recenteconomicc01wellgoog
}}</ref> Murray Rothbard (2002) gives a similar account.<ref>{{cite book
|title=History of Money and Banking in the United States
|url=https://archive.org/details/historymoneybank00roth_947
|url-access=limited
|last=Rothbard
|first=Murray
|year=2002|publisher= Ludwig Von Mises Institute |isbn= 0-945466-33-1 |pages=[https://archive.org/details/historymoneybank00roth_947/page/n163 164]–8 }}</ref>)

The fourth was in 1930–1933 when the rate of deflation was approximately 10 percent/year, part of the United States' slide into the [[Great Depression]], where banks failed and [[unemployment]] peaked at 25%.

The deflation of the Great Depression occurred partly because there was an enormous contraction of [[Credit (finance)|credit]] (money), [[bankruptcies]] creating an environment where [[monetary base|cash]] was in frantic demand, and when the [[Federal Reserve]] was supposed to accommodate that demand, it instead contracted the money supply by 30% in enforcement of its new [[real bills doctrine]], so banks failed one by one (because they were unable to meet the sudden demand for cash{{snd}}see [[Bank run]]). From the standpoint of the [[Fisher equation]] (see above), there was a simultaneous drop both in money supply (credit) and the [[velocity of money]] which was so profound that price deflation took hold despite the increases in money supply spurred by the Federal Reserve.

====Minor deflations in the United States====
Throughout the history of the United States, inflation has approached zero and dipped below for short periods of time. This was quite common in the 19th century, and in the 20th century until the permanent abandonment of the gold standard for the [[Bretton Woods system]] in 1948. In the past 60 years, the United States has experienced deflation only two times; in 2009 with the Great Recession and in 2015, when the CPI barely broke below 0% at −0.1%.<ref>{{cite news |first=Yuval |last=Rosenberg |title=America Is In Deflation. So What? |work=The Fiscal Times |date=26 February 2015 |url=http://www.thefiscaltimes.com/2015/02/26/America-Deflation-So-What}}</ref>

Some economists believe the United States may have experienced deflation as part of the [[2008 financial crisis]]; compare the theory of [[debt deflation]]. Consumer prices dropped 1 percent in October 2008. This was the largest one-month fall in prices in the U.S. since at least 1947. That record was again broken in November 2008 with a 1.7% decline. In response, the [[Federal Reserve]] decided to continue cutting interest rates, down to a near-zero range as of December 16, 2008.<ref>{{cite press release |title=FOMC statement |publisher=Board of Governors of the Federal Reserve System |date=16 December 2008 |url=http://www.federalreserve.gov/newsevents/press/monetary/20081216b.htm}}</ref>

In late 2008 and early 2009, some economists feared the U.S. would enter a deflationary spiral. Economist [[Nouriel Roubini]] predicted that the United States would enter a deflationary recession, and coined the term "stag-deflation" to describe it.<ref>{{cite web |title=Get Ready For 'Stag-Deflation' |first=Nouriel |last=Roubini |date=30 October 2008 |work=Forbes |url=https://www.forbes.com/2008/10/29/stagnation-recession-deflation-oped-cx_nr_1030roubini.html}}</ref> It was the opposite of [[stagflation]], which was the main fear during the spring and summer of 2008. The United States then began experiencing measurable deflation, steadily decreasing from the first measured deflation of −0.38% in March, to July's deflation rate of −2.10%. On the wage front, in October 2009, the state of [[Colorado]] announced that its state [[minimum wage]], which was indexed to inflation, was set to be cut, which would be the first time a state had cut its minimum wage since 1938.<ref>{{cite news |url=http://www.denverpost.com/headlines/ci_13547177 |title=Colorado minimum wage set to fall |first=Aldo |last=Svaldi |work=[[The Denver Post]] |date=13 October 2009}}</ref>