tag:blogger.com,1999:blog-11027528911364475.post5495330179550149870..comments2024-02-18T21:10:05.205-08:00Comments on EconomPic: Nominal vs. Real GDP: Why the GDP Deflator Overstates GDPJakehttp://www.blogger.com/profile/07946497592651234440noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-11027528911364475.post-64578624474979062342008-09-01T17:13:00.000-07:002008-09-01T17:13:00.000-07:00We're taking similar approaches for nearly identic...We're taking similar approaches for nearly identical reasons. I really tried to take apart the oil numbers and there's not a good answer - my own estimates of oil and real oil prices increases are less than the deflator but the yoy change in nominal prices and the deflator are very close. There may not be a good corrective. But the bigger picture issues are I think the important ones. Granted the price adjustment conundrums (puns intended) I think one gets a better handle on your questions with YoY looks AND by looking at Gross Domestic Purchases, i.e. GDP net of trade. I'd be happy to share those spreadsheets or - in this process - have now put up several posts trying to kick the issue to death.Unknownhttps://www.blogger.com/profile/07898348310819841317noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-24706738519303292612008-09-01T16:28:00.000-07:002008-09-01T16:28:00.000-07:00That was the rough intention of the post and I hon...That was the rough intention of the post and I honestly am not sure how to go about getting a better number (so many variable - i.e. should the huge decrease in oil imports put less weight to the spike in oil????)<BR/><BR/>At the end of the day, the goal is to get a better idea as to what made up the 3.3% number. I personally care because I want to know what type of strength the economy truly has. <BR/><BR/>In the short term, is the economy actually more productive because we used less oil (I'm sure we did, just not sure about the size of that decrease)? Or are things such as the 1.7% increase in personal consumption / 12% decrease in private investment more applicable? <BR/><BR/>Either way, by breaking down the numbers and getting challenged by readers such as yourself, I honestly feel I am better able to form my own opinion.Jakehttps://www.blogger.com/profile/07946497592651234440noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-19507856805303677852008-09-01T15:21:00.000-07:002008-09-01T15:21:00.000-07:00Jake - much appreciate your patience. Spent some t...Jake - much appreciate your patience. Spent some time tracking it back thru the numbers after your post and think things are getting clearer but lead to more questions. In essence what this boils down to is that import inflation was over-estimated, particularly for oil ? And as a result real imports were under-estimated, again largely oil ? And because real imports were actually much higher then subtracting them from GDP would lower real GDP estimates ? Or real GDP was estimated too high ?<BR/><BR/>Fair enough. A couple of challenges though. For one thing oil prices did shoot thru the roof in Q2. Which deflator should have been used ?<BR/><BR/>Aren't we glad we don't do this for a living ! :)Unknownhttps://www.blogger.com/profile/07898348310819841317noreply@blogger.com