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Definition – What is the GDP deflator?
The GDP deflator is a measurement of the difference between nominal (not adjusted for inflation) and real (adjusted for inflation) GDP.
Formula – How to calculate the GDP deflator
GDP Deflator = (Nominal GDP / Real GDP) x 100
Example
Nominal GDP is $1,000,000 and Real GDP is $1,100,000.
GDP Deflator = ($1,000,000 / $1,100,000) x 100 = 0.9090 = 90.90
Therefore, the GDP Deflator is 90.90.
Source and more resources
- World Bank Data – Country data on the GDP deflator – Country specific GDP deflator data.
- Wikipedia – GDP Deflator – An overview of the GDP deflator as well as links to country-specific resources.
- Khan Academy – GDP Deflator – Part of a larger course on Macroeconomics. This video overviews what the GDP deflator is and how it is calculated.
- ACDCLeadership (YouTube) – Macro Unit 2.6 – GDP Deflator – A video overview of the GDP deflator.
- Lumen Learning – Comparing Real and Nominal GDP – Part of a larger course on economics. It describes the differences between real and nominal GDP and how the GDP deflator interacts with them.