Yes, DEFLATION is a Scrabble word!

Letter values in Scrabble US: D 2, E 1, F 4, L 1, A 1, T 1, I 1, O 1, N 1.

Is it a valid word?

DEFLATION is a valid word in the official Scrabble dictionary (US), the UK Scrabble Dictionary and Words with Friends (ENABLE).

(geology) the erosion of soil as a consequence of sand and dust and loose rocks being removed by the wind
a contraction of economic activity resulting in a decline of prices
the act of letting the air out of something