What can exist is an oversupply of particular goods relative to the demand for them at the prices at which they are being offered for sale. What is preventing the buying of more of these goods is not ...

Declining prices can also be caused by a decline in aggregate demand, ... Workers will decrease spending, leading to less demand and more deflation. This deflationary spiral that is hard to break.

Deflation is not normally bad for an economy, except when it occurs as a reaction to over-inflation. ... a decrease in total or aggregate demand, or a decrease in the supply of money and credit.

Theoretically it may even further reduce aggregate demand and the general price level, and continue the downward spiral. Reifschneider and Williams (2000) describe this situation as a “deflation trap” ...

When prices go down, it’s generally considered a good thing—at least when it comes to your favorite shopping destinations. When prices go down across the entire economy, however, it’s called ...

Bad deflation occurs when aggregate demand falls faster than any growth in aggregate supply. So, deflation can be worse than inflation if it is brought about through negative factors, ...

As Mr. Bernanke stated in his speech, deflation is a collapse in aggregate demand and he laid out all the tools he would use to prevent a collapse in aggregate demand.

It takes chutzpah to argue that Ben Bernanke simply "doesn't understand" why the US is headed for deflation. But Steve Keen does it -- persuasively, at that.

Basically, almost every path that ends in any deflation at all now converges to point C--only those where the pace of deflation is trivial and is accompanied by aggregate demand well above ...