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Is Gdp Adjusted For Inflation?

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Here is a question for you. It occurs to me that Gross Domestic Product must be affected by inflation. If GDP is up by 2.5% & CPI by 2%, surely the real growth is only 0.5%?

And any increased inflation in the system causes GDP to further inflate & produce an inaccurate picture of what the economy is doing. It might be growing nominally, but contracting in reality.

Does anyone know if I'm right or wrong here?

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No, GDP is the net of growth minus the deflator. Inflation figures are a joke, by implication the GDP figure is also dubious, it's really just a measure of the leakage in the money supply, if you want a real measure of growth then look at productivity growth or exports, it's not pretty.

So much debt and so little growth.

Edited by BuyingBear

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Here is a question for you. It occurs to me that Gross Domestic Product must be affected by inflation. If GDP is up by 2.5% & CPI by 2%, surely the real growth is only 0.5%?

And any increased inflation in the system causes GDP to further inflate & produce an inaccurate picture of what the economy is doing. It might be growing nominally, but contracting in reality.

Does anyone know if I'm right or wrong here?

Sorry in advance.

Both are cooked to compliment each other. If you eat Chinese starter you want Chinese main course.

Just a joke only.

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A few questions I keep meaning to ask the ONS:

1. Do they just deduct the CPI (or RPI ?) figure off the total GDP figure (as TTRTR said) or actually adjust each seperate figure for each sector that may not be represented by the offical inflation stats? (E.g. ignore hedonics etc)

2. What ever the answer to the above... how can Crash Gordon project future tax earnings if the GDP figure is dubious?

So we could argue we are in a recession?

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A few questions I keep meaning to ask the ONS:

1. Do they just deduct the CPI (or RPI ?) figure off the total GDP figure (as TTRTR said) or actually adjust each seperate figure for each sector that may not be represented by the offical inflation stats? (E.g. ignore hedonics etc)

2. What ever the answer to the above... how can Crash Gordon project future tax earnings if the GDP figure is dubious?

So we could argue we are in a recession?

Recessions are marked by low income growth, job losses, closure of factories and facilities, what do you think? However, we inject liquidity into bricks and mortar in the form of cheap credit so everything is just fine.

When it comes to the GDP delfator they just love hedonics, see here..

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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