Effects of deflation

Deflation has effects on two main levels: on the corporate and on the governmental level.The effects of deflation are.Deflationary economies have many indirect socio-, political-, financial-, and economical effects.Generally, a one-time fall in the price level does not constitute a deflation.In economics, deflation is a decrease in the general price level of goods and services.This is the deflationary spiral.But any of these may occur separately without deflation.This becomes a deflationary spiral when prices fall below the costs of financing production.Consequently, deflation can be thought of as a phantom amplification of a loan's interest rate.Consequently deflation generally leads to, or is associated with a collapse in aggregate demand.