CPI can be useda as a proxy of inflation

Hi Rand, Debasmita Dey is correct and you have several other options such as the implicit price deflator for GDP or more specialized price indices that might be more relevant to tourism. The good news is that Federal Reserve Economic Data (FRED) has both of these Italian price indices for all the years in your sample. As you will see on the attached spreadsheet, it is relatively easy. Moreover, you can change from annual to quarterly, or something else easily; just look at a FRED tutorial.

Divide the current (i.e., nominal) values you have by the decimal equivalent of the price index to create real values (i.e., adjusted for inflation or deflation) as seen starting in cell J49.

The bad news is that your data for Italy's GDP seems to have some significant errors. It is possible that some missing zeros account for a nearly 90 percent drop in 2001, 2006, and 2014. Once again the FRED data may help and again look at the attached spreadsheet.

I hope this helps.

Rob

Thank you so much, the data is taken from several countries, I missed mentioning this. I am trying to conduct a cross-panel analysis. I managed to re-write the GDP to constant 2010. But now I need to do the same for the tourism receipts, how is it possible to do? is it the same way?

Yes, it is possible provided that you have a price index for each country. Just follow what I did for you in cell J-49 and K-49 (or L-49) on the spreadsheet and then copy and paste the formulas after you have entered the correct TR and price index data.

Rob Catlett thank you so much for all this effort, another question please, so I think I will do the deflating with the GDP deflator index - attached below-. The index however is the one of 2015. And I need the base year, as I mentioned in 2010. My professor suggested that I divided "to get the base year 2010 if the index is based in 2015= Just divide it by its 2010 value." but i did not understand this. What do we mean by dividing the index of 2015 with its 2010 value?