ECON 2002.01 Lecture Notes - Lecture 9: Gdp Deflator, Black Market

• School: Ohio State University
• Department: Economics
• Course: ECON 2002.01
• Professor: Guanyi Yang

Document Summary

Bath tub analogy: gdp per capita is only average, ignores distribution of income/inequality, data across countries is based on exchange rates, inaccurate conversion of money. Suppose country a has 2 products: pizza and water. [nominal] gdp for 2015: 10x + 50x1 = . [nominal] gdp for 2016: 12x + 60x = . Price is a nominal variable fluctuates all the time. Real gdp base year value comparison - using [base year prices] [real] gdp of 2015: 10x + 50x = . [real] gdp for 2016: 12x + 60x = . Gdp deflator = nominal value in year x / real gdp in year x * 100. Gdp deflator 2015 = 170/170 * 100 = 100. Gdp deflator 2016 = 240/204 * 100 = 117 we see inflation (increase) (base year gdp is always 100) Bls (bureau of labor statistics) tracks this every month.