Deflator

As it happens when you confront the data the Deflator is a reasonably accurate measure of what it's supposed to be.

Lowest Inflation Rate in 5 Years 2008

GDP Deflator versus CPI click for larger chart chart courtesy of Eric Jantzen

The Big Picture 2008

As previously noted, we are no longer calling the GDP Deflator by that misleading name; untill such time as the BLS models more accurately reflect reality, it shall be known as the GD Inflator.

Lowest Inflation Rate in 5 Years 2008

It had all these elements, but didn't see the same divergence between CPI and GDP Deflator.

Lowest Inflation Rate in 5 Years 2008

Should the GDP Deflator be as high as that implied by the CPI?

The Big Picture 2008

I was discussing this via email with Eric Jantzen of iTulip, and he showed me a variation of that, using the GDP Deflator it should be very very similar to the price index

The Big Picture 2008

I was discussing this via email with Eric Jantzen of iTulip, and he showed me a variation of that, using the GDP Deflator it should be very very similar to the price index

The Big Picture 2008

The GDP Deflator looks at all the goods and services that go into total economic activity while the consumer price index looks only at the basket that consumers buy.

Lowest Inflation Rate in 5 Years 2008

GDP Deflator versus CPI click for larger chart chart courtesy of Eric Jantzen

The Big Picture 2008

Posted the historical difference between the GDP Deflator and CPI this morning:

The Big Picture 2008