The deflator of GDP is the aggregated indicator of overall price level which pays off as a ratio of nominal and real GDP (Gross domestic product). It is one of the main price indexes applied in macroeconomic calculations to measurement of changes of price level.
It is required to you
- - GDP of the studied year nominal
- - GDP of the studied year real (i.e. in the prices of basic year)
Instruction
1. Define nominal GDP in the studied year. GDP (gross domestic product - GDP) represents the total cost of all goods and services which were made in one concrete country for a certain period of time. Generally for calculation of GDP the annual period is used. Nominal gross domestic product call GDP expressed in the prices of the current period. To learn its value, it is possible to use the website of the public statistical service (http://www.gks.ru/)
2. Define real GDP. Real GDP is gross domestic product in which change of price level is eliminated. It is presented in real terms, i.e. in the prices of that basic year in relation to which we need to calculate a deflator. In the conditions of tasks of a makroenomika real GDP, as a rule, is given. In practice on the website of Rosstat the deflator of GDP expressed as a percentage is presented. Concerning it it is possible to calculate real GDP. Thus, this indicator helps us to see real changes of the production of goods and services in the studied country and promotes identification of trends.
3. We substitute values known to us in a formula: GDP deflator = Nominal GDP / Real VVPPrimer of calculation of a deflator of GDP: if in 2010 nominal GDP was 120,000 usl. den. unit, and real GDP in the prices of basic year (2008) 100 000 usl. den. the unit, a deflator is equal 120 000/100,000 = 1.2. This result means that price level during this time grew by 1.2 times.
4. The deflator of GDP belongs to Paashe's indexes. These are indexes for the changing set of goods, or with variable scales. Also it can be calculated by the given formula. Actually, this formula is similar previous, but in the conditions of tasks sometimes give data not on GDP, and on the volume and the prices of the made/consumed goods. Having substituted data known to us in a formula, we will receive value of the Paashe index or a deflator of GDP.