Search box

Definition: Double deflation

OECD terminology

Broadly defined:
Procedure to obtain a measure of deflated value added that is based on a price index that combines the price index of gross output with the price index of intermediate inputs.

Narrowly defined:
Procedure to obtain a volume measure of value added by subtracting intermediate inputs at constant prices from gross output at constant prices. Subtraction of levels implies that constant prices reflect Laspeyres-type quantity indices.
Organization for Economic Cooperation and Development (OECD), "Measuring Productivity - OECD Manual: Measurement of Aggregate and Industry-Level Productivity Growth", Paris, 2001