In page navigation

Double deflation

Updated: Aug 20, 2021

The estimation of net output at constant prices by revaluing both the gross output and the inputs of materials, fuel, services, etc., using appropriate index numbers, then subtracting the latter from the former. In practice the necessary price indices are often not available, and it is common to deffate net output at current prices by a single price index, usually an index of gross output. Single deflation therefore assumes that the ratio of net to gross output at constant prices remains unchanged, which may not be so if, for example, production methods change over time.

Reference: The Penguin Dictionary of Economics, 3rd edt.

Sources & references
Risk disclaimer

Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >

James Knight
Editor of Education
James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the… read more.