Remember that "recovery" we experienced in the third quarter? Turns out nominal GDP bounced a "whopping" 3.2% (down 1% from the initial release). Or to put this figure in perspective, the 42nd highest quarter out of the last 251 (i.e. one of the lowest 17% quarters over the last 50+ years).
And while real GDP is the real production of the economy, nominal GDP is important for a debt burdened economy as debt is in nominal terms. Since the recession started in December 2007 nominal GDP is cumulatively negative (over 7 quarters), something that has not happened since WWII.
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgEOpr1XNMuowzlekxh8RgBgpzBCW-NpF5CXdO1OSVBVFWQIDSQ3kv2CRrKjqbRj_wAosc3oP60gk68-OY7JMJU-Ey4VF0wFG_WwtoOg_gr9M8RIW_tFeL_voY3MjT60_RqczyfpyknsQ/s400/nomgdp.png)
Some recovery.
Source: BEA
I am no chart expert, but that looks like an intact long term downtrend from 1979-present. Geting by with less but more debt?
ReplyDeleteYou have to remember that inflation has trended down over that time as well and this is nominal terms.
ReplyDeleteWell I always miss something.
ReplyDeleteI keep coming back to this:
ReplyDelete"And while real GDP is the real production of the economy, nominal GDP is important for a debt burdened economy as debt is in nominal terms."
It is such an important point.