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Is that an explanation? I get that if GDP growth is less than inflation, then in real terms the economy is shrinking, even if nominal GDP goes up. But stock pr
by abeppu 3y ago
Is that an explanation?
I get that if GDP growth is less than inflation, then in real terms the economy is shrinking, even if nominal GDP goes up. But stock prices are in nominal dollars; steady stock prices (or prices increasing at the same rate as GDP) would mean a real decline in value. But explaining why prices for these stocks are falling in nominal terms should involve something about why they would grow slower/shrink faster than the rest of the economy, right?
- tonyedgecombe 3y agoGDP growth is usually quoted in real terms.
- pwarner 3y agoMost reports of GDP growth use "real" dollars, that is inflation adjusted. Those continue to show growth. https://fred.stlouisfed.org/series/GDPC1 https://fred.stlouisfed.org/series/GDPC1 I mean, the math may be a bit off since measuring GDP and measuring inflation are both imperfect things, but they do try generally.