Inflation Adjuster Calculator

Only go here if you have a strong stomach (All I gotta say is: AY CARAMBA !?$%*&)

Inflation adjustment, or "deflation", is accomplished by dividing a monetary time series by a price index, such as the Consumer Price Index (CPI). The deflated series is then said to be measured in "constant dollars," whereas the original series was measured in "nominal dollars" or "current dollars." Inflation is often a significant component of apparent growth in any series measured in dollars (or yen, euros, pesos, etc.). By adjusting for inflation, you uncover the real growth, if any. You also may stabilize the variance of random or seasonal fluctuations and/or highlight cyclical patterns in the data. Inflation-adjustment is not always necessary when dealing with monetary variables--sometimes it is simpler to forecast the data in nominal terms or to use a logarithm transformation for stabilizing the variance--but it is an important tool in the toolkit for analyzing economic data.

The Consumer Price Index is probably the best known US price index, but other price indices may be appropriate for some data. The Producer Price Index and the GDP Implicit Price Deflator are some other commonly used indices, and numerous industry-specific indices are also available. The U.S. Bureau of Economic Analysis compiles a wide array if "chain-type" price indices for various kinds of personal consumption goods. A chain-type index is one that is obtained by chaining together monthly, quarterly, or annual changes in relative prices that are adjusted for changes in the composition of the commodity basket, so as to reflect changes in consumer tastes. (For more details on chain-type indices, see the following article.)

Websites:
http://data.bls.gov/cgi-bin/cpicalc.pl
http://www.duke.edu/~rnau/411infla.htm