Gross National Product (GNP) Deflator

AAA

DEFINITION of 'Gross National Product (GNP) Deflator'

An economic metric that accounts for the effects of inflation in the current year's gross national product by converting its output to a level relative to a base period. The GNP deflator is calculated with the following formula:

Gross National Product (GNP) Deflator

INVESTOPEDIA EXPLAINS 'Gross National Product (GNP) Deflator'

The GNP deflator provides an alternative to the Consumer Price Index (CPI). The CPI is based upon a basket of goods and services while the GNP deflator incorporates all of the final goods produced by an economy. This allows the GNP to more accurately capture the effects of inflation since it's not limited to a smaller subset of goods.

RELATED TERMS
  1. Economy

    The large set of inter-related economic production and consumption ...
  2. Consumer Price Index - CPI

    A measure that examines the weighted average of prices of a basket ...
  3. Gross Domestic Product - GDP

    The monetary value of all the finished goods and services produced ...
  4. GDP Price Deflator

    An economic metric that accounts for inflation by converting ...
  5. Inflation

    The rate at which the general level of prices for goods and services ...
  6. Gross National Product - GNP

    An economic statistic that includes GDP, plus any income earned ...
Related Articles
  1. Economics Basics
    Economics

    Economics Basics

  2. Why The Consumer Price Index Is Controversial
    Economics

    Why The Consumer Price Index Is Controversial

  3. Explaining The World Through Macroeconomic ...
    Options & Futures

    Explaining The World Through Macroeconomic ...

  4. The Importance Of Inflation And GDP
    Economics

    The Importance Of Inflation And GDP

comments powered by Disqus
Hot Definitions
  1. Walras' Law

    An economics law that suggests that the existence of excess supply in one market must be matched by excess demand in another ...
  2. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will ...
  3. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  4. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  5. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  6. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
Trading Center