I'm slightly confused how statistical authorities construct GDP deflator series. In the UK, these are produced by the Office for National Statistics.

We have know that that we can derive the GDP deflator in period $t$, denoted $d_t$, as: $$d_t = \frac{\text{nominal GDP}}{\text{real GDP}}\times 100$$

But that then begs the question how we calculate nominal and real GDP. I understand, at a high level, how statistical authorities collect data for nominal GDP. But how is real GDP derived?

Thanks for any help, Hmmm16


1 Answer 1


The deflator is similar to the CPI, so would be calculated similarly. Aside from consumer goods and services, it also includes price changes in goods and services purchased by government, businesses, etc. See here for comparison between the two.


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