INFLATION rates around the world have been sinking over the last three years. Pervasive economic weakness in the rich world and a slowdown in Chinese growth drove the initial decline. Lately tumbling oil prices have helped to push inflation into negative territory across much of the euro area. America, Britain and China, where inflation rates have dropped below 1%, may soon join Europe in deflation. Falling prices for things like petrol have been "unambiguously good" for consumers, in the words of Mark Carney, the governor of the Bank of England. But broad and persistent deflation is not a healthy thing for a modern economy. It will make big debts harder for households and governments to repay, and it could hinder central banks looking to perk up slumping economies.

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The Economist explains why deflation is bad