Nominal GDP Growth

Whenever we look at GDP growth, we almost always look at “real growth,” meaning adjusted for inflation. But it’s interesting to look at nominal growth as well. Ideally, the Fed should target interest rates to nominal GDP growth. Of course, that’s a lot harder than it looks.
Here’s the four-quarter change in nominal GDP going back several years.

This is the first time it’s been negative in over 50 years.

Posted by Eddy Elfenbein on June 1st, 2009 at 3:19 pm

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