Dismiss Notice
Join Physics Forums Today!
The friendliest, high quality science and math community on the planet! Everyone who loves science is here!

GDP deflator

  1. Sep 16, 2014 #1
    I would like to raise a question about GDP deflator. In my macroeconomics textbook, there is a statement like this: "GDP deflator gives the average price of output". I wonder why the deflator will give the average price as it only measure the ratio between nominal GDP and real GDP...
    Thanks for help!
     
  2. jcsd
  3. Oct 24, 2014 #2
    That's not the definition of deflator, the definition is the Prices_year_n*Quantities_year_(n-1)/(Prices_year_(n-1)*Quantities_year_(n-1) thus giving the ratio between prices of an year n and the prices of the year n-1.
     
Know someone interested in this topic? Share this thread via Reddit, Google+, Twitter, or Facebook




Similar Discussions: GDP deflator
  1. IQ and GDP (Replies: 35)

  2. GDP is a big fat lie (Replies: 38)

  3. 15% versus 9% of GDP (Replies: 16)

Loading...