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GDP Deflator

AnalyticsTrade Team
AnalyticsTrade Team Last updated on 26 Apr 2023

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GDP Deflator

The GDP deflator is an economic indicator used to measure the changes in prices of goods and services in an economy. It is calculated by dividing the nominal GDP by the real GDP and then multiplying by 100. The GDP deflator is used to compare the value of goods and services produced in different years, as it takes into account the effects of inflation. It is also used to compare the value of goods and services produced in different countries, as it takes into account the effects of exchange rates.

History of the GDP Deflator

The GDP deflator was first developed by the economist Irving Fisher in the early 20th century. Fisher was looking for a way to measure the changes in the purchasing power of money over time. He proposed the idea of a deflator, which would measure the changes in the prices of goods and services in an economy. The GDP deflator was later adopted by the United Nations in the 1950s as a way to compare the value of goods and services produced in different countries.

Comparison Table

Year Nominal GDP Real GDP GDP Deflator
2020 $20 trillion $18 trillion 111.1
2019 $18 trillion $17 trillion 105.9

Summary

The GDP deflator is an economic indicator used to measure the changes in prices of goods and services in an economy. It is calculated by dividing the nominal GDP by the real GDP and then multiplying by 100. The GDP deflator is used to compare the value of goods and services produced in different years, as it takes into account the effects of inflation. It is also used to compare the value of goods and services produced in different countries, as it takes into account the effects of exchange rates. For more information about the GDP deflator, you can visit the websites of the United Nations, the World Bank, and the International Monetary Fund.

See Also

  • Gross Domestic Product (GDP)
  • Real GDP
  • Nominal GDP
  • Inflation
  • Exchange Rate
  • Consumer Price Index (CPI)
  • Producer Price Index (PPI)
  • Gross National Product (GNP)
  • Gross National Income (GNI)
  • Gross Domestic Income (GDI)

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