Currently, the GDP deflator is 1.8%, which hardly reflects the true rise in prices.
Finally, the GDP deflator reported for 3Q2011 is expected to be only 4.3% higher than it was in 3Q2008.
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Judging by the CPI and the broader GDP deflator, actual inflation has already reached its highest level since 1991.
For example, does the GDP deflator number capture inflation of the stealthy kind?
The GDP deflator thus gives more weight to goods (such as capital goods) whose prices are falling the fastest.
The first and easy cut is simply Federal Interest Outlays as a Fraction of GDP divided by the GDP deflator.
During FY2010, NGDP grew by 4.47% (4th fiscal quarter over 4th fiscal quarter) and we experienced 1.63% inflation (based upon the GDP deflator).
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Representatives Mike Pence (Republican--Ind.) and Eric Cantor (Republican--Va.) have introduced legislation that would tie the cost basis of an asset to the GDP deflator.
Inflation, as measured by the GDP deflator, increased at 1.7% annually.
Since the abandonment of Bretton Woods, the dollar has lost 77% of its value against the GDP deflator and 97% of its value relative to gold.
The GDP deflator reflects the prices of a basket of goods and services, the contents of which change over time to reflect evolving patterns of spending.
According to the GDP deflator, a broad index of prices, deflation tightened its grip on the economy in the fourth quarter, with prices falling at an annual rate of 4.4% (see chart).
For the 18 years from a peak in the second quarter of 1994 to the end of 2012, the Japanese GDP deflator the broadest measure of the price of goods and services declined by 17.8%.
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Meanwhile, despite a headline GDP deflator that appears benign, the gross domestic purchases deflator (prices for what we buy) rose at a 4.2% rate in Q2 and is up 3.5% versus a year ago.
Unlike the goods and services prices index, the GDP deflator measures change In compensation of employees, operating surplus (including mixed income), and consumption of fixed assets arisen from changes in prices and nominal net taxes.
The implicit GDP price deflator was up at a 1.4 percent rate in the third quarter, 0.1 percent less than in the advance estimate and above the 0.7 percent increase in the second quarter.
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