Abstract
This paper presents a brief description of the Canadian Department of National Defence (DND) price trend model and the associated chained Laspeyres defence specific price index. The paper also discusses the theoretical justification for and against defence specific inflation (DSI) and presents empirical evidence that explains DSI. Comparative analysis is also conducted with other popular price indices such as the Gross Domestic Product (GDP) deflator and the Consumer Price Index (CPI).
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