Biflation is an economic condition where inflation and deflation occur simultaneously in different sectors of the economy. For example, asset prices such as real estate and stocks may rise due to monetary easing, while prices for consumer goods or wages may stagnate or fall due to weak demand. This creates a complex environment for central banks and policymakers, as traditional tools designed to address either inflation or deflation may prove insufficient.
Example
“During the post-2008 recovery, some economists described the environment as biflation since housing and equity prices surged while wages remained stagnant.”