Why does inflation decrease but prices continue to go up?

This is a good question and it refers to the difference between deflation and disinflation. Sometimes if inflation is at 2% and it decreases to 1.5% for example, there will still continue to be a general price level  increase of 1.5% over the next month, but the rate of increase in prices has slowed down.

Disinflation is this slow down in the increase in prices but the prices do still increase. What you're thinking of is deflation which means that inflation is negative and the price level is decreasing. Deflation is quite rare in economics but disinflation happens all the time due to slowing of the increase in the price level.

LB
Answered by Luke B. Economics tutor

2239 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

It is the oil price crash of 2014, and the Norwegian government is fearing a recession. What policies can be enacted to avoid a recession?


What are the features of an imperfect or monopolistic market?


With reference to the extract, how price elastic would supply of nuclear energy be?


Why is the concept of the “marginal “ so important in economics?


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2026 by IXL Learning