GDP Deflator Inflation Rate Calculator
Understanding Inflation Rate from GDP Deflator
The GDP deflator is a measure used in economics to track the price level of all domestically produced final goods and services in an economy in a given year. It is a comprehensive price index that includes all components of GDP. The GDP deflator is calculated by dividing the nominal GDP by the real GDP and multiplying by 100.
The inflation rate, as measured by the GDP deflator, indicates the percentage change in the overall price level of goods and services between two periods. A positive inflation rate signifies that prices have risen, while a negative rate (deflation) indicates a general decrease in prices.
This calculator helps you determine the inflation rate between two periods using their respective GDP deflator values. The formula used is:
Inflation Rate (%) = [(GDP Deflator Current Year – GDP Deflator Previous Year) / GDP Deflator Previous Year] * 100
Example:
If the GDP deflator for the current year is 115.5 and the GDP deflator for the previous year was 110.2, the inflation rate would be:
Inflation Rate = [(115.5 – 110.2) / 110.2] * 100
Inflation Rate = [5.3 / 110.2] * 100
Inflation Rate ≈ 4.81%
This means that, on average, prices have increased by approximately 4.81% from the previous year to the current year, as indicated by the GDP deflator.
function calculateInflationRate() {
var gdpDeflatorCurrentYear = parseFloat(document.getElementById("gdpDeflatorCurrentYear").value);
var gdpDeflatorPreviousYear = parseFloat(document.getElementById("gdpDeflatorPreviousYear").value);
var resultElement = document.getElementById("result");
if (isNaN(gdpDeflatorCurrentYear) || isNaN(gdpDeflatorPreviousYear)) {
resultElement.innerHTML = "Please enter valid numbers for both GDP deflator values.";
return;
}
if (gdpDeflatorPreviousYear === 0) {
resultElement.innerHTML = "GDP Deflator for the previous year cannot be zero.";
return;
}
var inflationRate = ((gdpDeflatorCurrentYear – gdpDeflatorPreviousYear) / gdpDeflatorPreviousYear) * 100;
resultElement.innerHTML = "Inflation Rate: " + inflationRate.toFixed(2) + "%";
}
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