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That 1% already the real GDP growth rate. Nominal growth is more like 6-7%, as inflation is a bit higher in the EU than in the US.
by jltsiren 3y ago
That 1% already the real GDP growth rate. Nominal growth is more like 6-7%, as inflation is a bit higher in the EU than in the US.
- JumpCrisscross 3y ago> 1% already the real GDP growth rate In Euros. The dollar was also losing real value in that time. You can't compare a real figure from one time period with nominal figures from another without doing some adjusting. (You're describing, in essence, a carry trade.)
- jltsiren 3y agoYou earned €1 last year and €1.06 today. You could exchange that to $1 last year and $1.17 today. If US inflation is currently 3.1% and you go to the US, that money buys you 13% more than $1 last year. These numbers change from day to day, because exchange rates are full of effectively random noise. Of course, the real growth was only 1% and not 13%.