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finance a la shmoop what is disinflation disinflation often confused with dat

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inflation refers to the decline in inflation rates over time in 1973

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America was fully juiced with Warbucks from Vietnam inflation hovered around [soldiers firing weapons]

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the mid going on high single digits and then higher from there like 7% or more

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depending on where you look him and Jimmy Carter stepped in on this guy and [Carter walks into office]

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raised the federal rates the Fed rates their massively stamping out the wild

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bull economy and putting the brakes on inflation but it didn't happen until

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after Carter was actually out of office and Reagan took over inflation [Reagan replaces Carter in office]

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eventually had rocketed all the way up to about 14 ish percent on an annualized

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basis looking at the monthlies in the 1980-81 period right here

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well the crux of dis inflation is that inflation is still positive it's just

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becoming well less positive and or like you know how you feel not long after you

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say I do and the honeymoon is over and you have to take out the garbage so

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under Carter the US inflation rates were attacked in a variety of ways the [Carter in a boxing ring]

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biggest of which was to make the cost of renting capital very expensive which

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cooled the economy but it took a long time like note how slowly inflation

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rates came down and well really it was decades before things fully stabilized

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you can see how things slowly disinflation the raging levels that

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peaked at post-vietnam era 1314 percent then slid all the way down to a 1 to 3

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percent way down there where it's hovered for a

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while so that's disinflation still inflation but just less of it deflation [Disinflation deflating]

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is when inflation turns negative like prices are actually declining and yes

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we've had periods of deflation before albeit very short ones like in the post

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mortgage crisis Mallove's in 2009 right here yes yes it's rare but it happens

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got it okay class dismissed

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