The asset price deflators for software are the official deflators (own-account and purchased),
but otherwise the GDP deflator is used for intangible assets. This is an area
where almost nothing is known, aside from some very exploratory work by the Bureau
of Economic Analysis and Corrado et al. (2011). These papers attempt to derive price
deflators for knowledge from the price behaviour of knowledge intensive industries and
the productivity of knowledge producing industries. Two observations suggest that using
the GDPdeflator overstates the price deflator for knowledge, and so understates the impact
of knowledge on the economy. First, many knowledge-intensive prices have been falling
relative to GDP. Second, the advent of the internet and computers would seem to be a
potential large rise in the capability of innovators to innovate, which would again suggest
a lowering of the price of knowledge due to strong growth in productivity in the process
of innovation itself, in contrast to the rise in prices implied by the GDP deflator. Thus our
use of the GDP deflator almost certainly understates the importance of intangible assets.