BEA Deflators for Information and Communications Technology Goods and Services: Historical Analysis and Future Plans

The accuracy and integrity of BEA’s featured measures, including inflation-adjusted (i.e. “real”) GDP, consumer spending and business investment, rely on the ability to accurately measure quality adjusted price indexes. It is often the case that high-profile, innovative goods and services that reflect rapidly changing technologies and notable improvements present significant measurement challenges using traditional approaches, especially when required to be produced at high frequencies. With an aim toward facilitating and encouraging further price research, this paper first provides a historical perspective and an analysis of BEA’s ICT prices, including an overview of the sources and methods used to construct BEA’s quality-adjusted prices. In the second part of the paper, we discuss current-work and future plans for continuing to ensure the accuracy of BEA’s price indexes and corresponding inflation-adjusted measures. Appendix A provides an update that assesses recent progress in price measurement as reflected in BEA’s 15th comprehensive update of the NIPAs, released July 27, 2018.