For the countries covered by the analysis as a whole, the growth differential between the consumption deflator
and the value added deflator
has been small and depends on the precise measure of the consumption deflator
The greatest difference between industry-specific and aggregate deflators
shows up in industries where labor and other input costs have a different growth rate from the single index chosen.
For the GDP, CPI, and PCE deflators
, the ratio of the variance of true inflation to the variance of the measurement error ([[GAMMA].
The purpose of this brief note is to show the extent to which the choice of the deflator
can alter the adjustment of a monetary economy to various shocks in a qualitative, and hence important, way.
BEA personal income is deflated by the implicit price deflator
for personal consumption expenditures, hereafter referred to as the PCE Deflator
While this is a reasonable stand-in until something better can be developed, trends in deflators
for some categories of intangible capital could be quite different from the GDP deflator
were constructed by BEA in 1985 using annual price indexes for computing equipment that were initially developed by the IBM Corporation.
These two alternative deflators
have diverged considerably more in the United States than in Canada over the 1961-2007 (Chart 6).
3) Specifically, the current-dollar figures reported by survey respondents are adjusted using implicit price deflators
developed for each industry from unpublished detail on current- and constant-dollar nonresidential fixed investment in the national income and product accounts.
Implicit Price Deflators
for the Relation of Gross National Product, Net National Product, and National Income
P&E expenditures estimates have been revised to incorporate new seasonal-adjustment factors from 1984 to date and new P&E implicit price deflators
) from 1973 to date.
The latest estimates indicate a larger upward revision in planned real spending than in planned current-dollar spending because the latest projected increase in the capital goods price deflator
for "all industries' is lower than the 1.