This graduate thesis analyzes deflation theories and the deflationary crisis in Croatia. By means of various analyses, the paper provides insights into the theories of deflation and deflationary crisis in Croatia. The main goal of the research is to analyze the concept of deflation as a monetary phenomenon, its historical development, modern theories and to present various proposals that include a defined strategy that will lead to a general increase in the price level, i.e. to a reduction in the deflation rate and a transition to the target rate of stimulating inflation. In this paper we will come to the conclusion that the implementation of an unconventional monetary policy leads to such an effect. Furthermore, the purpose of this research is also to point out the urgent need to solve the problem of deflation, as well as to warn about known historical scenarios that show the deflationary spiral and long-term economic stagnation. Other auxiliary objectives are: To define the problems and circumstances in which deflation occurs in a historical context; to analyze the main causes of deflation or the deflationary crisis in Croatia and to analyze the existing solutions to the problem of the deflationary crisis, by means of the so-called reflationary monetary strategies (unconventional monetary policy) by central banks. The work will theoretically systematize and conceptually present the findings of secondary data collected from various sources of professional literature, scientific studies, scientific articles and internet sources.