We know the both GDP deflator and consumer price index are often used for measuring inflation. Now my question is how a case in which there is a significant difference between them be justified? My another question is that which one of them is more impacted by money supply?

  • $\begingroup$ You need to look at what is in the basket of goods for the CPI. Some things which contribute to GDP (and which affect the GDP deflator) are not in that basket for the CPI. $\endgroup$ – ahorn May 5 '18 at 20:04

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