real GDP is not calculated by dividing nominal GDP by inflation.
What does growth look like if you do divide nominal GDP by inflation? (I might look this up at some point, but I’m more likely to remember if I write this comment.)
Do you know why it’s not done this way? Presumably it has its own weirdnesses, but off the top of my head I’m not sure what they’d be. (Other than “there’s lots of ways you might measure inflation”, but that’s true of nominal GDP too I think, and I’d guess also true of the details of how chaining is implemented.)
Well for one, I’m pretty sure that this would allow cases where a Pareto increase in production results in a decrease in (NGDP/inflation). I haven’t actually tried to work out an example, though.
What does growth look like if you do divide nominal GDP by inflation? (I might look this up at some point, but I’m more likely to remember if I write this comment.)
Do you know why it’s not done this way? Presumably it has its own weirdnesses, but off the top of my head I’m not sure what they’d be. (Other than “there’s lots of ways you might measure inflation”, but that’s true of nominal GDP too I think, and I’d guess also true of the details of how chaining is implemented.)
Well for one, I’m pretty sure that this would allow cases where a Pareto increase in production results in a decrease in (NGDP/inflation). I haven’t actually tried to work out an example, though.