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In economics, the GDP deflator (implicit price deflator for GDP) is a measure of the change in prices of all new, domestically produced, final goods and services in an economy. GDP stands for gross domestic product, the total value of all goods and services produced within that economy during a specified period.

The GDP deflator is not based on a fixed market basket of goods and services. The basket is allowed to change with people's consumption and investment patterns. Therefore, new expenditure patterns are allowed to show up in the deflator as people respond to changing prices. and/or by Brand:.

Calculation

Measurement in National Accounts

In most systems of National Accounts the GDP deflator measures the difference between the real (or chain volume measure) GDP and the nominal (or current price) GDP. The formula used to calculate the deflator is:

Dividing the nominal GDP by the GDP deflator would then give the figure for real GDP, hence deflating the nominal GDP into a real measure.

It is often useful to consider implicit price deflators for certain subcategories of GDP, such as computer hardware. In this case, is 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. My Broadband :: iBurst : Chilli Internet spices up iBurst market.