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Why Does the GDP Deflator Give a Different Rate of Inflation

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Why does the GDP deflator give a different rate of inflation than does the CPI?


Definitions:

Market Index

A statistical measure that shows changes in a financial market by tracking the performance of a set of selected stocks.

Explanatory Factors

Variables that are thought to explain changes or variations in a particular variable of interest, often used in statistical models to understand outcomes.

Industrial Production

The total output, often measured in physical units, of factories, mines, and utilities within an economy.

Inflation

The tempo at which the general cost of goods and services rises, weakening the purchasing strength.

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