Inflasjonøkte

Inflasjonøkte is a term used in Norwegian economic discourse to describe monetary values that have been adjusted for inflation, i.e., expressed in constant purchasing power rather than in nominal money. It corresponds to what English-language sources refer to as inflation-adjusted or real values. The adjustment uses a price index, most often the Consumer Price Index (CPI) or the GDP deflator, and is done relative to a base year or price level.

Calculation typically follows the formula: Real value = Nominal value × (Price index in base year / Price index in current year). By converting figures to a common price level, inflasjonøkte figures remove the direct effects of price changes and facilitate comparisons of real growth, welfare, or purchasing power over time.

Applications include wage comparisons, pension adjustments, contract payments, government revenues and expenditures, and company performance assessments over multiple years. For example, a salary of 500,000 NOK in a year with a CPI of 120, converted to base-year terms with CPI 100, yields 500,000 × 100/120 ≈ 416,667 NOK in base-year terms.

Limitations arise from dependence on the chosen price index and base year. Quality changes, introduction of new goods, and substitution biases can affect the accuracy of inflation adjustments. Moreover, inflasjonøkte figures do not capture distributional effects or non-monetary aspects of welfare.

Relation to other concepts: inflasjonøkte is the Norwegian analogue of “inflasjonjustert” or real terms. See also inflation, CPI, GDP deflator, real income. Etymologically, it blends inflasjon with økte, reflecting its meaning of inflation-adjusted figures.