The GDP deflator, also known as GDP price deflator, is an economic metric that accounts for inflation by converting output measured at current prices into constant-dollar GDP. This deflator shows how much a change in the base year’s GDP relies upon changes in the price level.
The GDP deflator measures the extent of price level changes, or inflation, within the economy. This includes the prices of goods and services from businesses and the government as well as any purchased by consumers. The calculation of the deflator shows how changes in the base year’s GDP rely upon price level changes.