Price deflation

These amounts describe worldwide research and development spending by member companies of the Pharmaceutical Research and Manufacturers of America and are expressed in constant 2002 dollars using the National Institutes of Health Biomedical R D Price Deflator. See Cockburn (2004), p. 11. 

Data from IMS Health, accessed online at www.imshealth.com/ims. Nominal figures converted to 2000 dollars using the implicit GDP price deflator. 

GJ in 2001 dollars (using the U.S. GDP implicit price deflator). The relationship between the... 

The GNP values shown in Table 2.3 are expressed in dollars for the year calculated. When current dollars are used to measure economic activity, however, real growth is obscured by the effects of inflation, which decrease the real worth of the dollar. To correct the GDP for inflationary effects, price indexes using 1987 prices as the base year are computed by the Department of Commerce. The components of GNP are then converted into constant dollars by using the appropriate price index. In Table 2.4 the GNP has been corrected for the effects of inflation. The GNP deflator is an implicit price deflator derived from the rate of inflation. 

Figures are based on a total of 133 firms listed in the Compustat file under Standard Industrial Code (SIC) code 2834 in at least 1 year between 1971 and 1990. The number of firms vary from year to year due to firms entry and exit from SIC 2834. b Adjusted by GNP implicit price deflator. 

Federal sources of R D funds to companies are excluded in this year, d Adjusted by GNP implicit price deflator. 

Inflation adjustments were made using the GNP implicit price deflator. 

NOTE All crests were adjusted using the GNP implicit price deflator. Facilities surveyed were Charles River, Taconlc Farms, and Hazleton. These facilities focus on breeding only. Although Hazelton conducts testing, it is carried out in a separate division. 

Sales were reported to OTA in current dollars, but OTA converted them to constant 1990 dollars using the GNP implicit price deflator. OTA had 11 years of data which allowed examination of sales over a 14-year period relative to the year of patent expiration. Data on each compound were aligned according to the year of patent expiration. For example, sales in the first year after patent expiration for compounds whose patents expired in 1984 were those reported in 1985, whereas sales in the first year after patent expiration for compounds whose patents expired in 1987 were those reported in 1988. Thus, 1988 inflation-adjusted sales for the 1987 drugs were combined with 1985 inflation-adjusted sales of the 1984 drugs to obtain inflation-adjusted sales 1 year after patent expiration for the entire sample. 

Costs have been adjusted for inflation using the GDP price deflator available at www.measuringworth.com. The figures include, to the extent possible, the cost of ground transport systems built specifically for the airport prior to its opening but do not include costs of expanding either the airport or its ground transport infrastructure thereafter Source Dempsey (2000 and media accounts)... 

Adjusted for inflation, Heathrow s Terminal 5 cost more than twice as much per increment of design capacity (miUion passengers per year) as Terminal 4, which opened in 1986. Similarly, the development of the Airbus A380, which first flew commercially in 2007, cost 50% more per seat than the Airbus A320, which first flew in 1988 (cost comparisons are authors calculations based on contemporary development cost estimates adjusted with the relevant GDP price deflator). 

Figure 1.11 Price deflation in consumer electronics (UK high street prices)... 

A further cause of price deflation, it has been suggested, is the Internet, which makes price comparison so much easier. The Internet has also enabled auctions and exchanges to be established at industry-wide levels, which have also tended to drive down prices. 

Note Adjusted to 1987 constant dollars, using US Dept, of Comn>erce GNP implicit price deflator... 

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