Defining deflation, inflation and disinflation

DEFLATION: A widespread and prolonged drop in prices of goods and services, in the values of home, stocks and other asset prices, and a drop in wages. The nation's last serious bout with deflation was during the Great Depression during the 1930s.

INFLATION: An upward and persistent spiral in the prices of goods and services charged to consumers, as well as a run-up in commodity prices like oil. To try to keep ahead of rising prices, workers will demand ever higher wages, leading to wage inflation. The nation's last major inflation problem was in the late 1970s and early 1980s. Consumer prices spiked 13.3 percent in 1979 and another 12.5 percent in 1980.

DISINFLATION: A slowing down of the rate at which prices increase. Typically happens during recessions when sales drop and businesses are unable to pass on price increases to consumers.