Deflation (deflationization)

The price adjustment of economic data recorded by statistics, especially in the course of national accounting. Since 2005, gross domestic product in Germany has been deflated using the previous year’s price method, as has been the case in the U.S.A. since 1996 and in Japan since 2004, and no longer using the price method of an increasingly distant base year. This change was made on the basis of an ordinance of the European Commission. – This has nothing to do with deflation as a fall in prices, although it is often confused with deflation. – See price index, hedonic. – For Germany, see the statistical section of the respective monthly report of the Deutsche Bundesbank, under the heading “Economic situation” (where the gross domestic product is broken down into individual items both at current prices and after adjustment for price changes, according to origin and use).

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