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Hello!

Need help, obviously :))

So, I want to deflate the monthly index of industrial production, and I have the monthly data on CPI, with base year 2005. Am I doing it right:

Date - IIP - CPI (base=average of 2005) - divider - Real value of IIP
2007m01 - 88,7 - 102,7 - 1,027 - 86,37

so is it ok, just to divide the nominal value of iip with the CPI (divided by 100) or is the procedure different?

Thank you so much!


edit: and another question, do I deflate first or deseason the series?

I thought the index of industrial production was already inflation adjusted, but maybe my memory's off.

I thought the index of industrial production was already inflation adjusted, but maybe my memory's off.

no, the data I have is gross data.

btw, do you know, if I should deflate first or deseason?

Probably deaseason first, but one hopes it doesn't make much difference. This assumes you are using non-seasonally adjusted CPI.