Deflation

In economics, deflation is a decrease in the general price level of goods and services. Deflation occurs when the inflation rate falls below 0% (a negative inflation rate). Inflation reduces the real value of money over time; conversely, deflation increases the real value of money — the currency of a national or regional economy. This allows one to buy more goods with the same amount of money over time.

Economists generally believe that deflation is a problem in a modern economy because it increases the real value of debt, and may aggravate recessions and lead to a deflationary spiral.

Although the values of capital assets are often casually said to deflate when they decline, this usage does not comply with the definition of deflation; a more accurate description for a decrease in the value of a capital asset is economic depreciation. Another term, the accounting conventions of depreciation are standards to determine a decrease in values of capital assets when market values are not readily available or practical. Deflation is distinct from disinflation, a slow-down in the inflation rate, i.e. when inflation declines to lower levels.

DEFLATE

In computing, deflate is a data compression algorithm and associated file format that uses a combination of the LZ77 algorithm and Huffman coding. It was originally defined by Phil Katz for version 2 of his PKZIP archiving tool. The file format was later specified in RFC 1951.

The original algorithm as designed by Katz was patented as U.S. Patent 5,051,745 and assigned to PKWARE, Inc. As stated in the RFC document, an algorithm producing DEFLATE files is widely thought to be implementable in a manner not covered by patents. This has led to its widespread use, for example in gzip compressed files, PNG image files and the .ZIP file format for which Katz originally designed it.

Stream format

A Deflate stream consists of a series of blocks. Each block is preceded by a 3-bit header:

Deflation (disambiguation)

Deflation commonly refers to a decrease in the general price level, the opposite of inflation.

Deflation may also refer to:

See also