Measuring Economic Growth
Real GDP = (Nominal GDP / Price Level) * 100
To adjust nominal GDP to real GDP:
1. Remove price level from nominal GDP data.
Divide nominal GDP by the contemporaneous price level.
2. Convert to base year prices.
Multiply by the base year price level (100).
Measuring Economic Growth (Example)
Find real GDP for 2018.
- Plug numbers from Table 6.5 into the equation.
- Use t = 2018.
Real GDP = (Nominal GDP / Price Level) * 100
Real GDP = (20,500.6 / 110) * 100
- 2018 real GDP in 2012 prices = 18,636.91.
U.S. Nominal GDP and Price Level, 2009-2018
Year Nominal GDP (billions of dollars) Price Level (GDP deflator)
2009 $14,448.9 96
2010 $14,992.1 96
2011 $15,542.6 98
2012 $16,197.0 100
2013 $16,784.9 102
2014 $17,521.7 104
2015 $18,219.3 105
2016 $18,707.2 106
2017 $19,485.4 108
2018 $20,500.6 110