2 ms·

IANAEconomist: how would one go about measuring the portion of inflation due to profits? I'd guess that it's some sensitivity model?

• nostrademons 3y ago
  Nominal GDP, real GDP, personal income, and government tax receipts are all macroeconomically tracked stats. Subtract out taxes and personal income from nominal GDP and you have profits.
  • guerrilla 3y ago
    Now point me to a website that does this for me so that I don't need to write programs or make spreadsheets :)
  • s1artibartfast 3y ago
    You just calculated prof azov its. Not inflation caused by profits? Answering where the money went doesn't explain where it came from
    • nostrademons 3y ago
      There's an identity where nominal GDP = real GDP * GDP deflator%, where the GDP deflator is a measure of inflation that also includes exports. The calculation I described is basically just computing the components of GDP through the income approach, GDP = wages + rent + interest + net imports + taxes + profits. Then you do this for both nominal and real GDP. The ratio between them is inflation within each factor of production. A weighted sum of these individual inflation rates should give back the overall GDP deflator; comparing the contribution of an individual factor of production's term vs. the overall inflation number gives the percentage of inflation due to a particular factor of production.