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GDP ... denominated in fiat currency
by platformdecay 3y ago
GDP ... denominated in fiat currency
- CSMastermind 3y agoInflation adjusted the US GDP grew from $5.30 trillion in 1970 to $22.67 trillion in 2023. Which is about a 4x increase in real terms. https://www.multpl.com/us-gdp-inflation-adjusted/table/by-year#:~:text=Dec%2031%2C%201972%205.91%20trillion%20Dec%2031%2C,1971%205.53%20trillion%20Dec%2031%2C%201970%205.30%20trillion https://www.multpl.com/us-gdp-inflation-adjusted/table/by-ye...
- VirusNewbie 3y agowhy would you adjust for inflation, what we are talking about would mean adjusting for M2.
- Dylan16807 3y agoWhy would you adjust for M2? Inflation exaggerates GDP growth. M2 doesn't. If you measure a country and M2 and GDP go up together, that's important to know, but you don't "adjust for M2" and pretend that GDP didn't actually go up.
- VirusNewbie 3y agoHmm, let me ask you this. It we double the money supply because say, banks are allowed to loan more to each other, but that money doesn’t make it to the average consumer, does CPI go up and does GDP go up?
- Dylan16807 3y agoWe're not changing anything else with businesses? I wouldn't expect those numbers to change very much then. Certainly far less than 2x.
- VirusNewbie 3y agook, maybe too abstract an example. If a bank makes a loan (creating new money) to loan to some rich guy, who decides to pay 1B to buy a bunch of Microsoft stock, that counts as growing the GDP, even if the majority of the money just stays in the financial sector and never drives up the price of anything measured by CPI.
- Dylan16807 3y agoGDP measures goods and services, not stock purchases. A few trillion dollars of stocks bouncing back and forth don't change it at all.