Will the ‘Real’ GDP Please Stand Up?

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Sep 29, 2011 Doug Short 

How do you get from Nominal GDP to Real GDP? You subtract inflation. The Bureau of Economic Analysis (BEA) uses its own GDP deflator for this purpose, which is somewhat different from the BEA’s deflator for Personal Consumption Expenditures and quite a bit different from the better-known Bureau of Labor Statistics’ inflation gauge, the Consumer Price Index.

Let’s take a look at what “Real” GDP would look like if it were calculated with these other gauges.
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