Reflation

Reflation (also redeflation ) is a financial policy measure in the sense of a financial and economic policy that is actively aimed at eliminating deflation . The aim is to raise prices again that have fallen below cost recovery. Other economic policy goals, e.g. B. a balanced state budget and price stability are then subordinated to the avoidance of general, sustained price declines.

Reflation can occur through the interaction of an expansive monetary policy and an expansive fiscal policy , i.e. through lower interest rates, an increased money supply (through the central bank) and higher government spending. Alois Oberhauser (member of the Scientific Advisory Board at the Federal Ministry of Finance , as of March 2015) does not consider expansionary monetary policy alone, i.e. with a restrictive fiscal policy , to be promising. The reason for an uncompromising reflation policy is mostly concerns about a deflationary spiral .

Web links

Wiktionary: Reflation  - explanations of meanings, word origins, synonyms, translations

Individual evidence

1. ^ Definition of "reflation" | Gabler Economic Lexicon . ( gabler.de [accessed December 9, 2017]).
2. ↑ Alois Oberhauser: The control of bank liquidity as a monetary policy task. In: Problems of the money supply control. Berlin 1978, p. 142 f:
   "Without a parallel financial policy, expansionary monetary policy is largely doomed to failure."