The Difference Between the CPI and GDP Deflator (Explained!)

An explanation of some #macroeconomic #indicators to help #econ students succeed.

A user commented on an old video of mine titled, "Calculating the Inflation Rate with CPI Values (   • Calculating the Inflation Rate with C...  ) saying, "Btw, I heard that cpi and gdp deflator were that same, is that right?"

This is not completely true. They both are indeed used to calculate the inflation rate as they are both price indexes. However, what goods and services they are using are different. The video explains.

Here is a good write-up by the BLS going more in-depth on the difference: https://www.bls.gov/opub/mlr/2016/art...

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