Conversely, using this accurate method the relatively low interest rates in 2019, 2020, and early 2021 actually have a negative impact on the GDP deflator. Substituting indirect metrics for modified direct ones has a limited impact on the GDP deflator during the years in question. I rebase the Case-Shiller national housing price index (national series; the 20 city version would be slightly higher) to 2017 = 1. In Figure 1, I present the BEA consumption housing deflator, the Case-Shiller housing price index, and the index adjusted by the 30 year mortgage rate. Figure 3: BEA GDP (orange), GDP incorporating PCE using Case-Shiller House Price Index – national times mortgage rate factor index, using BEA weight of 15% (light green), using 30% (dark green), Antoni-St.Onge estimate (red square), all in bn.Ch.2017$ SAAR.

Source: New York Times October 13, 2024 09:47 UTC