5 times that of the growth rate of the GDP deflator
In the following sections we present three periods in three countries (Finland, Hungary and Italy), which have been chosen because they exhibit sizeable differences between their aggregated cyclical positions and the disaggregated cyclical positions, corrected by deflators
In light of this, we considered four measures of inflation based on four measures of the aggregate price level: 1) the GDP deflator
, 2) the price deflator
for the nonfarm business sector (NFB), 3) the Consumer Price Index (CPI), and 4) the price deflator
for personal consumption expenditures (PCE).
See Duffle (1996) for an extensive discussion of the state-price deflator
It is tempting to conclude this section with an overview comment suggesting the superiority of the sectoral deflation approach, and it presumably is the case that most analysts will find deflating health expenditures by an implicit health-sector price index preferable to deflating these expenditures by the CPI, the implicit GDP deflator
, or by a combination of the health sector component of the CPI plus an implicit price deflator
for government goods and services.
In the first place, it conveys a general-message of caution about the use of the deflator
used for the real money stock, in particular in the specification of models not derived explicitly from utility maximization: for certain changes, the effects can be qualitatively different.
In general, they can be expressed as: * = Y / N X D where * is real mean income; Y is aggregate income; N is number of recipients; and D is the price deflator
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.
The study also compared the authors' data-intensive approach that estimates R&D costs separately for the five specific industries with an approach that uses a common deflator
The GDP deflator
is a measure of the change in the prices of all components of output in the economy.
Because the terms of trade is based on implicit price deflators
, rather than on exchange rates, it may reflect changes both in prices and in the composition of exports and imports.
In 1985, BEA introduced quality-adjusted deflators
for purchases of computers in GNP for 1969-84.