GNP deflator

GNP deflator

a PRICE INDEX that is used as a means of adjusting money GROSS NATIONAL PRODUCT values to obtain real GNP values (see REAL VALUES). Real GNP is important because this represents output of physical goods and services, not their money values. An economy may appear to produce more goods and services (ECONOMIC GROWTH) because money GNP has increased, but this may simply reflect price increases (INFLATION) without any increase in physical output. The GNP deflator is thus designed to remove the influence of price changes and record only real changes.
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(4.) The Greenbook and the Survey of Professional Forecasters provide forecasts of the GNP deflator for the period 1975Q1-1991Q4 and of the GDP deflator from 1992Q1 onwards.
We match apples to apples between the FOMC and SPF projections where possible--i.e., GDP/GNP deflator to GDP/ GNP deflator for either the full sample or through 1988 and the CPI to CPI from 1989 through 1999.
Real money balances were computed as nominal money supply divided by the GNP deflator (RM1) and alternatively by the CPI (RM11).
The adjustment is calculated by applying the following deflators to the financial perspective (at 1999 prices):- A cumulative deflator of 6.12% for the period 2000-2002 to the ceiling for Heading 1 (Agriculture) and Heading 2 (Regional policy).- The cumulative GNP deflator in Euros for 2000-2002 (6.64%) to the other ceilings, apart from Subheading 6 (Monetary reserve), which is expressed in current prices.
Once income and money were added to the VAR equations containing the GNP deflator and unit labor costs, the results fall in line with Ashenfelter and Card, as Granger causality was estimated only from wages to prices.
Table 1 Economic Forecasts of March 1981, for 1981 and 1982 Compared with Actual Figures Reagan Congressional Administration Budget Office Forecasts for 1981 Real GNP growth 1.1 1.3 GNP deflator 9.9 10.3 Nominal GNP Growth 11.1 11.8 Forecasts for 1982 Real GNP growth 4.2 2.5 GNP deflator 8.3 9.2 Nominal GNP growth 12.8 11.9 Actual Blue Chip Figures Forecasts for 1981 Real GNP growth 1.3 1.9 GNP deflator 9.9 9.4 Nominal GNP growth 11.3 11.6 Forecasts for 1982 Real GNP growth 3.7 - 1.9 GNP deflator 8.6 6.0 Nominal GNP growth 12.6 4.0
Average Forecast Errors from Forecasts Made in the Early 1980s Variable: Forecast Horizon (Quarters) Chase DRI WEFA BVAR Real GNP: 1 2.4 2.0 3.1 2.8 2 2.6 2.3 2.6 2.1 4 2.7 2.5 2.4 1.9 8 2.0 2.0 1.7 1.3 GNP deflator: 1 1.4 1.4 1.9 2.5 2 1.0 1.1 1.5 2.5 4 1.4 1.4 1.7 3.3 8 2.2 2.2 2.4 4.1 Nominal GNP: 1 3.2 2.7 3.7 3.6 2 3.2 2.7 3.6 3.3 4 3.6 3.2 3.8 4.0 8 3.6 3.6 2.4 3.5 Treasury bill rate: 1 0.2 0.1 0.4 0.1 2 1.8 1.9 1.8 1.7 4 3.3 3.2 3.2 2.9 8 2.9 3.7 1.1 3.7
Certainly the declining real deficit could not be derived simply by deflating the increasing nominal deficit by the GNP deflator.
Figure 1 also reports domestic GNP deflators,(12) together with the GNP deflator of a major trading partner, Britain in the case of the US dollar and the USA in the case of sterling.(13) Domestic prices almost doubled during the war in both cases.
average hourly earnings in manufacturing, the GNP deflator, and the CPI.
P = absolute value of the inflation rate (GNP deflator) in the two-year period prior to the election, interacted with I.
Observe also that it may not be possible to simultaneously test both the Friedman and the Buchanan hypotheses, for the inclusion of lagged values of government spending, receipts and deficits would lead to prohibitive multicollinearity.(10) We therefore use two distinct VAR systems to separately test the causal effect of receipts and deficits on government spending.(11) In addition to G and R (or F), our VAR model includes four other key macro variables; namely, real GNP (X), the monetary base (B), the GNP deflator (P), and the interest rate on three-month Treasury bills (I).