GDP deflator

Updated: Aug 20, 2021

A price index used to assess whether there has been a real rise or fall in gross domestic product (GDP) from one year to another. GDP at current prices is divided by the GDP deflator to obtain an index of GDP at base-year prices. A GDP deflator is based on a broader class of goods than the ’retail price index (RPI), since it needs to take account of the prices of investment goods and goods bought by the public sector as well as consumer goods prices.

Reference: Oxford Press Dictonary of Economics, 5th edt.

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