Investor Glossary-deflatorInvestor Glossary-deflatorInvestor Glossary-deflatorInvestor Glossary-deflatorInsightful stock market charts - Click here
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z


The HTML to link to this page

A deflator is used to convert current dollars into dollars that are adjusted for price changes. Because price levels change over time, direct comparisons of output, wages, and other dollar-denominated measures are often meaningless. To usefully compare a salary of $50,000 in 1965 with a salary of $100,000 in 2005, a deflator must be used. Among the best known deflators is the GDP deflator, also known as the GDP implicit price deflator. The GDP deflator is a quarterly price index calculated by dividing GDP in some period by what the same GDP would have been in the base period. In other words, the GDP deflator is nominal GDP divided by real GDP. Some economists consider the GDP deflator superior to the consumer price index (CPI) as a measure of price change. While the CPI is based on a fixed basket of goods and services, the GDP deflator reflects naturally the introduction of new products and changing consumer habits.

Rate this deflator definition...

Learn about investing with the Investor Glossary Term of the Day

Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.

Popular Terms: required rate of return, ex-dividend date, Key Rate Duration, FICO score, VIX, deferred revenue, class C shares, in escrow, wholly-owned subsidiary, reverse mortgage, minority interest, option premium, risk management, LIBOR, irrevocable trust, average price per share, 144a, implied volatility, margin rate, annual return, current ratio, dividends payable, Zero Cost Collar, real GDP, limit order, EBITDA, open position, stock market close, cancelled check, retained earnings, debt service coverage, deferred tax, phantom income, command economy, APR, ex-dividend, FTSE, per diem, 1031 exchange, labor relations, inflation, stock split, covered put, 401a, diluted share, liquidity ratio, balance sheet, 1035 exchange, quality assurance

Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use