Using GDP-deflator as a proxy for the Inflation rate

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lakis
Posts: 13
Joined: Wed Oct 22, 2014 7:33 am

Using GDP-deflator as a proxy for the Inflation rate

Postby lakis » Mon May 18, 2015 6:28 am

Hi all,

I am newly-research student and I would like your opinion regarding the derivation of the Inflation rate in Quarterly data points.

I have decided to use Quarterly GDP-deflator, (defined as 100*(Nominal GDP/Real GDP)) as a proxy for the Inflation. So the data I have right now is the quarterly GDP deflator (in logs) and I want to derive the Inflation rate in quarterly data points.

So for example, if the GDP deflator in logs: 2000:Q1 defl1
2000:Q2 defl2
2000:Q3 defl3
2000:Q4 defl4
2001:Q1 defl5
2001:Q2 defl6

then the quarterly Inflation rate for 2001:Q1 will be (defl5) - (defl1)
and for the quarterly Inflation rate for 2001:Q2 will be (defl6) - (defl2) ??????????

Many thanks

lakis
Posts: 13
Joined: Wed Oct 22, 2014 7:33 am

Re: Using GDP-deflator as a proxy for the Inflation rate

Postby lakis » Tue Jun 09, 2015 12:34 pm

Could anyone please help me with that? Thank you

trubador
Did you use forum search?
Posts: 1518
Joined: Thu Nov 20, 2008 12:04 pm

Re: Using GDP-deflator as a proxy for the Inflation rate

Postby trubador » Wed Jun 10, 2015 4:43 am

Which inflation rate do you need? If it is the annual inflation (i.e. year-on-year), then your calculations are fine. However, if you are interested in the quarterly inflation (i.e. quarter-on-quarter), then 2001Q2 should read (defl6-defl5).


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