Economics
Intermediate

GDP Deflator

A broad price index covering all goods in GDP, not just a consumer basket.

Formula

Deflator=Nominal GDPReal GDP×100Deflator = \dfrac{Nominal\ GDP}{Real\ GDP}\times 100

Variables

DeflatorGDP price index
Nominal GDPCurrent-price output
Real GDPConstant-price output

Example

$660B / $600B × 100 = 110

Did You Know?

Unlike the CPI’s fixed basket, the deflator automatically reflects whatever the economy actually produces.

deflatorinflationgdp