LONDON — It’s the D-word that’s pushing the European Central Bank into a corner.

But it’s not debt — Europe’s main economic problem in recent years — that is driving speculation the ECB will switch on the printing press to help the economy.

It’s deflation.

At first glance, deflation, which is generally defined as a sustained drop in prices, sounds good — getting goods cheaper surely warms the heart of any consumer.

The problem lies when prices fall consistently over time, as opposed to temporary declines, which can give economic activity a boost. The recent sharp fall in the oil price, for example, is expected to help growth.

Longer-term deflation encourages people to put off spending and can prove difficult to reverse because it requires altering people’s expectations. It can lead to years of economic stagnation, as in Japan over the past two decades, or at worst, into something more pernicious, such as the Great Depression of the 1930s.

Deflation has been a rarity in modern economic times compared with high inflation, in which the price of goods spirals higher. However, both can cause economic havoc.

A consistent drop in prices chokes an economy mainly by enticing consumers to delay big purchases beyond everyday needs such as food and energy in the knowledge that they will cost less down the line. Keeping money under your mattress suddenly becomes an appealing investment strategy.

And faced with lower prices, businesses also make less profit and start looking to reduce costs. That means job losses, wage cuts and a growing reluctance to invest and innovate. The economy is weighed down further, prompting businesses to cut costs further, exacerbating the deflationary spiral.

Unlike the Fed and many other major central banks, the ECB has held off on massive bond-buying to fight deflation, not least because it is technically more difficult across a bloc of countries.

However, ECB President Mario Draghi has hinted recently that the bank is ready to launch such a program, called quantitative easing, if needed to get inflation back toward target.

In effect, a central bank creates new money when doing quantitative easing. The hope is such a program stokes activity and gets rid of the deflation.

In Germany, the idea is met with caution.

As well as conjuring up images of the 1920s hyperinflation, there are more immediate concerns — bond-buying could lead to German taxpayers being lumbered with the debts of countries like Greece, Italy and Portugal.

Proponents say it helped in the U.S. and Britain, where growth has rebounded. Not so in Japan, the country that can best testify to deflation’s stickiness. Two decades on from when deflation took root following a stock and real estate collapse, Japan is still trying to rid itself of deflation.

Over the past couple of years, Prime Minister Shinzo Abe has launched Japan’s most sustained effort to combat deflation. “Abenomics” involves huge amounts of stimulus from the Bank of Japan, heavy government spending and wide-ranging economic reforms.

The jury is out on whether it will work — Japan fell back into recession in the third quarter.

Pan Pylas,

The Associated Press