Disinflation's a decrease in the rate of inflation. This phase of the business cycle, in which retailers can no longer pass on higher prices to their customers, often occurs during a recession. In contrast, deflation occurs when prices are actually dropping. To fully understand disinflation we need to first understand inflation. The word inflation originally meant an increase in the the supply of money which resulted in an increase in prices. But, in more recent years, the word inflation has co… (More on Disinflation)