If a GDP deflator is continually greater than 100%, does that mean inflation is still occuring?
If the difference in deflators from year to year is continually greater than 1%, does that mean inflation is occuring at a greater and greater rate?
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Sign up to join this communityIf a GDP deflator is continually greater than 100%, does that mean inflation is still occuring?
If the difference in deflators from year to year is continually greater than 1%, does that mean inflation is occuring at a greater and greater rate?
No, a deflator greater than 100 means that the price level is higher than in the base year. It doesn't mean that inflation is still occurring. In fact, you could be experiencing deflation after a period of inflation and if prices today are still higher than the base year, have the deflator be above 100. A growing deflator is an indication of inflation. To detect inflation acceleration you'd need to see changes in the log(deflator) growing over time.