Deflator

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Deflator

A statistical factor used to convert current dollar purchasing power into inflation-adjusted purchasing power. Enables the comparison of prices while accounting for inflation in two different time periods.

Deflator

A mathematical tool used to adjust for inflation when comparing two prices from two different periods of time. One uses a deflator when one seeks to determine whether or not prices are rising in real terms.
References in periodicals archive ?
Our point estimates of [theta] are higher in the second sample period, implausibly so for the NFB deflator.
Price measures: GDP deflator is the ratio of nominal GDP (GDP) and real chain-weighted GDP (GDPH); nonfarm business deflator (LXNFI); Consumer Price Index (PCU); and personal consumption expenditures deflator (JCBM2).
Bureau of Labor Statistics' measure of nominal unit labor costs divided by the nonfarm business deflator (LXNFU/LXNFI).
When quality-adjusted deflators for computers and OCAM were introduced in 1985, BEA identified three major problems with the information used to construct the price indexes: (1) Coverage of the sample was limited to certain types of equipment and selected manufacturers; (2) list, rather than transaction, prices were included in the sample; and (3) the information on shipments was incomplete.
Implicit Price Deflators and Fixed-Weighted Price Indexes for Computers and Peripheral Equipment and for Business Purchases of Office, Computing, and Accounting Machinery, 1982-88
The construction of the deflators was described in "Improved Deflation of Purchases of Computers," SURVEY OF CURRENT BUSINESS 66 (March 1986): 7-9.
In Canada, between 1961 and 2007 it is notable that whether measured using the CPI or the PCE deflator, labour's terms of trade grew at roughly similar rates, 0.
As a result, the evolution of labour's terms of trade in the United States is highly dependent on whether the terms of trade are viewed as the ratio of the GDP deflator to the PCE deflator or as the ratio of the GDP deflator to the CPI (Chart 6).
10) The lack of consistency between the CPI and the consumption deflator in the United States has been a subject of much discussion, and is widely acknowledged.
At the same time, real spending for industries that purchased computers in recent years would, ceteris paribus, be revised up due to the downward revision of the NRFI deflator for computers in July 1987 (see page 15 of the July 1987 SURVEY).
For the two other components of GNP that include computers--the change in business inventories and PCE--no use was made of the new deflators because separately identifiable estimates were not available.
The use of the new deflators for computers represents a major improvement over the previously used conventions of assuming no price change for computers or of assuming the same price changes as for related products.