The GDP Deflator calculator computes the ratio of Nominal GDP over the Real GDP. This reflects the prices of goods and services.
INSTRUCTIONS: Enter the following:
- (GDPnominal) This is the nominal gross domestic product.
- (GDPreal) This is the real gross domestic product.
GDP Deflator (GDPDeflator): The calculator returns the GDP Deflator.
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The Math / Science
The formula for the GDP Deflator is:
`GDP_"Deflator" = (GDP_"nominal") / (GDP_"real")`
where:
- GDPDeflator is the ratio of nominal and real GDP.
- GDPnominal is GDP computed using that year's prices
- GDPreal is GDP computed using the base year's prices.
Reference:
- Mankiw, N. Gregory. "Chapter 10:The GDP Deflator." Principles of Macroeconomics. 6th ed. Mason, OH: Thomson/South-Western, 2004. 205. Print.