Editing GDP deflator

{{short description|Economic measure}}
In [[economics]], the '''GDP deflator''' ('''implicit price deflator''') is a measure of the money price of all new, domestically produced, final goods and services in an economy in a year relative to the real value of them.  It can be used as a measure of the value of money.  GDP stands for [[gross domestic product]], the total monetary value of all final goods  and services produced within the territory of a country over a particular period of time (quarterly or annually).

Like the [[consumer price index]] (CPI), the GDP deflator is a measure of price inflation/deflation with respect to a specific base year; the GDP deflator of the base year itself is equal to 100. Unlike the CPI, the GDP deflator is not based on a fixed [[market basket|basket]] of goods and services; the "basket" for the GDP deflator is allowed to change from year to year with people's consumption and investment patterns.

==Calculation==

===Measurement in national accounts===

In most systems of [[national accounts]] the GDP deflator measures the ratio of nominal (or current-price) GDP to the real (or chain volume) measure of GDP. The formula used to calculate the deflator is:

: <math>\operatorname{GDP\ deflator} = \frac{\operatorname{Nominal\ GDP}}{\operatorname{Real\ GDP}}\times 100</math>

The [[nominal GDP]] of a given year is computed using that year's prices, while the [[real GDP]] of that year is computed using the base year's prices.

The formula implies that dividing the nominal GDP by the real GDP and multiplying it by 100 will give the GDP Deflator, hence "deflating" the nominal GDP into a real measure.<ref>{{cite web | title=Concepts and Methods of the U.S. National Income and Product Accounts | publisher=Bureau of Economic Analysis | date=July 2008 | url=https://www.bea.gov/national/pdf/NIPAhandbookch1-4.pdf | url-status=dead | archive-url=https://web.archive.org/web/20171108104038/https://www.bea.gov/national/pdf/NIPAhandbookch1-4.pdf | archive-date=2017-11-08 | access-date=2018-03-09 }}</ref>

It is often useful to consider implicit price deflators for certain subcategories of GDP, such as computer hardware.  In this case, it is useful to think of the price deflator as the ratio of the current-year price of a good to its price in some base year.  The price in the base year is normalized to 100.  For example, for computer hardware, we could define a "unit" to be a computer with a specific level of processing power, memory, hard drive space and so on.  A price deflator of 200 means that the current-year price of this computing power is twice its base-year price - price inflation.  A price deflator of 50 means that the current-year price is half the base year price - price deflation. This can lead to a situation where official statistics reflect a drop in real prices, even though they nominally have stayed the same. 

Unlike some [[price index|price indices]] (like the [[CPI]]), the GDP deflator is not based on a fixed [[market basket|basket]] of goods and services.  The basket is allowed to change with people's consumption and investment patterns.<ref>{{cite web |url=http://www.politonomist.com/gdp-deflator-and-measuring-inflation-00491/ |title=GDP Deflator and Measuring Inflation — Politonomist |access-date=2016-09-23 |url-status=dead |archive-url=https://web.archive.org/web/20090117035026/http://www.politonomist.com/gdp-deflator-and-measuring-inflation-00491/ |archive-date=2009-01-17 }}</ref>  Specifically, for the GDP deflator, the "basket" in each year is the set of all goods that were produced domestically, weighted by the market value of the total consumption of each good.  Therefore, new expenditure patterns are allowed to show up in the deflator as people respond to changing prices. The theory behind this approach is that the GDP deflator reflects up to date expenditure patterns. For instance, if the price of chicken increases relative to the price of beef, people may spend more money on beef as a substitute for chicken.

In practice, the difference between the deflator and a price index like the [[Consumer price index]] (CPI) is often relatively small. On the other hand, with governments in developed countries increasingly utilizing price indexes for everything from fiscal and monetary planning to payments to social program recipients, even small differences between inflation measures can shift budget revenues and expenses by millions or billions of dollars.

===Argentina===
The GDP and GDP deflator are calculated by the [[INDEC]].

===Australia===
The GDP and GDP deflator are calculated by the [[Australian Bureau of Statistics]].

===Canada===
The GDP and GDP deflator series are published by [[Statistics Canada]].<ref>{{cite web|url=https://statcan.gc.ca/|title=Statistics Canada: Canada's national statistical agency / Statistique Canada : Organisme statistique national du Canada|website=statcan.gc.ca|access-date=7 May 2018|url-status=live|archive-url=https://web.archive.org/web/20180322131625/https://www65.statcan.gc.ca/|archive-date=22 March 2018}}</ref>

===Hong Kong===
The GDP and GDP deflator series are published by the [[Census and Statistics Department (Hong Kong)|Census and Statistics Department]].<ref>{{cite web |url=http://censtatd.gov.hk/hkstat/sub/so250.jsp |title=National Income - Overview &#124; Census and Statistics Department |access-date=2013-06-04 |url-status=live |archive-url=http://archive.wikiwix.com/cache/20130604025654/http://censtatd.gov.hk/hkstat/sub/so250.jsp |archive-date=2013-06-04 }} Census and Statistics Department: National Income</ref>

===India===
The GDP deflator is reported by the [[Ministry of Statistics and Programme Implementation (India)|Ministry of Statistics and Programme Implementation]]. It is calculated quarterly and released annually only.

===Japan===
The GDP and GDP deflator are calculated by the [[Cabinet Office (Japan)|Cabinet Office]].

===Nepal===
The GDP and GDP deflator series are published by the [[Central Bureau of Statistics (Nepal)|Central Bureau of Statistics]].<ref>{{cite web|url=http://cbs.gov.np/sectoral_statistics/national_accounts|title=National Accounts - Central Bureau of Statistics|website=cbs.gov.np|access-date=7 May 2018|url-status=live|archive-url=http://archive.wikiwix.com/cache/20151130110414/http://cbs.gov.np/sectoral_statistics/national_accounts|archive-date=30 November 2015}}</ref>

===Pakistan===
The [[State Bank of Pakistan]] reports the GDP deflator and the real GDP.

===United Kingdom===
The GDP and GDP deflator series are published by the [[Office for National Statistics]].<ref>{{cite web|url=http://www.statistics.gov.uk/|title=Statistics - release calendar - GOV.UK|website=www.statistics.gov.uk|access-date=7 May 2018|url-status=live|archive-url=https://web.archive.org/web/20060213205513/http://www.statistics.gov.uk/|archive-date=13 February 2006}}</ref>

===United States===
The GDP and GDP deflator are calculated by the [[United States Bureau of Economic Analysis|U.S. Bureau of Economic Analysis]].

=== Türkiye ===
The GDP, GDP deflator and inflation are all calculated by the [[Turkish Statistical Institute]].<ref>{{Cite web |title=TÜİK - Veri Portalı |url=https://data.tuik.gov.tr/Kategori/GetKategori?p=ulusal-hesaplar-113&dil=2 |access-date=2023-10-06 |website=data.tuik.gov.tr}}</ref>

==See also==
{{Portal|Economics}}
*[[Fisher index]]
*[[Étienne Laspeyres]]
*[[Hermann Paasche]]
*[[Chained volume series]] (of GDP data.)
*[[Personal consumption expenditures price index]] (PCE)
*[[Inflation]]
*[[Gross domestic product]] (GDP)

==References==
{{reflist}}

==External links==
*[https://www.gov.uk/government/publications/gross-domestic-product-gdp-deflators-user-guide/gdp-deflators-user-guide Gross Domestic Product (GDP) deflators: user guide]

===Data===
*[https://archive.today/20130113154457/http://stats.oecd.org/WBOS/Index.aspx?QueryId=14744 OECD GDP deflator data]
*[http://www.imf.org/external/pubs/ft/weo/2008/01/weodata/weorept.aspx?pr.x=28&pr.y=14&sy=1980&ey=2013&scsm=1&ssd=1&sort=country&ds=.&br=1&c=512%2C446%2C914%2C666%2C612%2C668%2C614%2C672%2C311%2C946%2C213%2C137%2C911%2C962%2C193%2C674%2C122%2C676%2C912%2C548%2C313%2C556%2C419%2C678%2C513%2C181%2C316%2C682%2C913%2C684%2C124%2C273%2C339%2C921%2C638%2C948%2C514%2C943%2C218%2C686%2C963%2C688%2C616%2C518%2C223%2C728%2C516%2C558%2C918%2C138%2C748%2C196%2C618%2C278%2C522%2C692%2C622%2C694%2C156%2C142%2C624%2C449%2C626%2C564%2C628%2C283%2C228%2C853%2C924%2C288%2C233%2C293%2C632%2C566%2C636%2C964%2C634%2C182%2C238%2C453%2C662%2C968%2C960%2C922%2C423%2C714%2C935%2C862%2C128%2C716%2C611%2C456%2C321%2C722%2C243%2C942%2C248%2C718%2C469%2C724%2C253%2C576%2C642%2C936%2C643%2C961%2C939%2C813%2C644%2C199%2C819%2C184%2C172%2C524%2C132%2C361%2C646%2C362%2C648%2C364%2C915%2C732%2C134%2C366%2C652%2C734%2C174%2C144%2C328%2C146%2C258%2C463%2C656%2C528%2C654%2C923%2C336%2C738%2C263%2C578%2C268%2C537%2C532%2C742%2C944%2C866%2C176%2C369%2C534%2C744%2C536%2C186%2C429%2C925%2C178%2C746%2C436%2C926%2C136%2C466%2C343%2C112%2C158%2C111%2C439%2C298%2C916%2C927%2C664%2C846%2C826%2C299%2C542%2C582%2C443%2C474%2C917%2C754%2C544%2C698%2C941&s=NGDP_D&grp=0&a= IMF database of country GDP deflators for 1980-2013]
*[http://www.briefing.com/Silver/Calendars/EconomicReleases/gdp.htm Briefing.com: GDP-Adv.]
**Compare with [http://www.briefing.com/Silver/Calendars/EconomicReleases/cpi.htm Briefing.com: CPI]

{{DEFAULTSORT:Gdp Deflator}}
[[Category:Price indices]]
[[Category:Gross domestic product]]