GDP: Real versus Nominal GDP
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GDP: Real versus Nominal GDP

Intuition Publishing
Updated Sep 24, 2020

To measure an economy's performance by the quantity of goods and services produced, the calculation of nominal GDP must be adjusted to remove the influence of price changes. This is achieved by calculating real GDP. We explain how to calculate real GDP using nominal GDP figures, before outlining the chain-weighted GDP technique that is extensively used throughout the world for measuring real GDP.