Deflator (Noun)
Meaning
A statistical factor designed to remove the effect of inflation; inflation adjusted variables are in constant dollars.
Classification
Nouns denoting possession and transfer of possession.
Examples
- To calculate the real GDP, economists use a deflator to adjust for inflation over time.
- The consumer price index serves as a deflator to deflate nominal wages and express them in real terms.
- By applying a suitable deflator to the historical data, researchers can analyze the true growth of the economy over the past few decades.
- The use of a GDP deflator is essential in economics to quantify changes in productivity and efficiency in real terms.
- Comparing the nominal and real interest rates requires a precise deflator to eliminate the impact of inflation on the interest rates.