<p>Use the <a href="http://data.worldbank.org/indicator/FP.CPI.TOTL?locations=US" rel="nofollow noreferrer">World Bank data</a> on US inflation to deflate the UN Comtrade dataset, so that it is also in constant prices.</p>

<p>Select Download, at the right side of the page, and you can get the dataset in csv or other formats.</p>

<p>To deflate the trade data, simply divide the values of bilateral trade by the value of each years CPI index, and then multiply them by the value of CPI in 2010 (the base year, which is 100 in this case). Alternatively, rebase the CPI index, by dividing all values by 100, so that CPI in 2010 is equal to 1. Then, divide the trade data by this new index. Both approaches are equivalent.</p>

CC BY-SA 3.0
2017-04-20T13:26:31.970Z
So, for example, for deflating US-Argentina bilateral trade for 2011, it should be: ( bilateral.trade.value.in.curr.USD(yr 2011) / CPI (yr 2011) ) * CPI(yr 2010) =  bilateral.trade.value.in.const.2010.USD(yr 2011) ? Also which CPI index should I use? The Reporter's or the Partner's? In the example, the US' CPI or Argentina's?
Rafael
CC BY-SA 3.0
2017-04-20T14:57:47.790Z
Yes, that is the formula. You have to use US CPI.
luchonacho
CC BY-SA 3.0
2017-05-15T17:01:19.937Z
a quick follow-up: is this method standard for any trading dyad (for instance, China-Argetina)? Do they all go by US CPI simply because the reporting is done in USD?
Rafael
CC BY-SA 3.0
2017-05-15T17:11:41.373Z
@Rafael I don't know if one or another method is "standard". The answer however might depend on what your objective is (which is not stated in the question). Can you elaborate?
luchonacho
CC BY-SA 3.0
2017-05-15T17:22:37.593Z
I want to deflate to real values trade between several South American countries and their largest trading partners. So I have dyads for US and all South Americans countries, EU and S.Am. and China and S.Am. By your answer, I was in doubt whether using US CPI was recommended just for the US or if it is the approach for any trading dyad, as long as it is being reported in USD.
Rafael
CC BY-SA 3.0
2017-05-15T18:30:14.123Z
@Rafael Using the same currency will make trade flows comparable across regions, as it solves the problem of how to compare trade between, say Argentina and EU, and Argentina and US. The other option is to use the value of the local currency (e.g. Argentina), but that requires much more data. I would suggest you use USD.
luchonacho
CC BY-SA 3.0
2017-04-20T08:44:24.297Z
2017-04-20T08:44:24.297Z
luchonacho
<p>I am using WB (country GDP) data in combination with UN Comtrade (bilateral trade) data. I need to divide bilateral trade by GDP so as to find out which % of a country's GDP comes from bilateral trade. 
The problem is WB has values in constant 2010 USD while UN Comtrade in current USD. </p>

<p>How can I transform the current USD values in constant 2010 USD values? </p>

<gdp><value><deflation><international-trade>
Converting current to constant USD values for trade data (UN Comtrade)
Rafael
# Converting current to constant USD values for trade data (UN Comtrade)

(Asked by: username_0 on 2017-04-20)

I am using WB (country GDP) data in combination with UN Comtrade (bilateral trade) data. I need to divide bilateral trade by GDP so as to find out which % of a country's GDP comes from bilateral trade.
The problem is WB has values in constant 2010 USD while UN Comtrade in current USD.

How can I transform the current USD values in constant 2010 USD values?

**Tags:** gdp, value, deflation, international-trade


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## 1 answers

### Answer by username_1 on 2017-04-20. Score: 0 | Accepted answer

Use the [World Bank data](http://data.worldbank.org/indicator/FP.CPI.TOTL?locations=US) on US inflation to deflate the UN Comtrade dataset, so that it is also in constant prices.

Select Download, at the right side of the page, and you can get the dataset in csv or other formats.

To deflate the trade data, simply divide the values of bilateral trade by the value of each years CPI index, and then multiply them by the value of CPI in 2010 (the base year, which is 100 in this case). Alternatively, rebase the CPI index, by dividing all values by 100, so that CPI in 2010 is equal to 1. Then, divide the trade data by this new index. Both approaches are equivalent.

> **Comments:**
> **username_0**: So, for example, for deflating US-Argentina bilateral trade for 2011, it should be: ( bilateral.trade.value.in.curr.USD(yr 2011) / CPI (yr 2011) ) * CPI(yr 2010) =  bilateral.trade.value.in.const.2010.USD(yr 2011) ? Also which CPI index should I use? The Reporter's or the Partner's? In the example, the US' CPI or Argentina's?  
> **username_1**: Yes, that is the formula. You have to use US CPI.  
> **username_0**: a quick follow-up: is this method standard for any trading dyad (for instance, China-Argetina)? Do they all go by US CPI simply because the reporting is done in USD?  
> **username_1**: @username_0 I don't know if one or another method is "standard". The answer however might depend on what your objective is (which is not stated in the question). Can you elaborate?  
> **username_0**: I want to deflate to real values trade between several South American countries and their largest trading partners. So I have dyads for US and all South Americans countries, EU and S.Am. and China and S.Am. By your answer, I was in doubt whether using US CPI was recommended just for the US or if it is the approach for any trading dyad, as long as it is being reported in USD.  
> **username_1**: @username_0 Using the same currency will make trade flows comparable across regions, as it solves the problem of how to compare trade between, say Argentina and EU, and Argentina and US. The other option is to use the value of the local currency (e.g. Argentina), but that requires much more data. I would suggest you use USD.  

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