"How do you measure GDP growth? In money? Your would have to subtract inflation. How do you measure inflation? Increase in money supply?" Real GDP growth (what

"How do you measure GDP growth? In money? Your would have to subtract inflation. How do you measure inflation? Increase in money supply?" Real GDP growth (what is usually called just GDP) measures do subtract inflation (called the GDP Deflator, which uses a dynamic market-basket based on consumption patterns, somewhat different than the fixed basket used for the Consumer Price Index). Nominal GDP (aka NGDP) is measured just in dollars, and thus does not account for inflation. Any time you see figure labeled just GDP, it is going to be Real GDP. GDP is more a measure of money changing hands than anything else. Energy consumption is not 100% correlated, as there are different patterns of trade than there used to be. A more interesting question is why we focus so much on national numbers, as most of the large forces in the economy are international. Keeping score at the national level creates things like the inequality of income illusion, where global inequality is decreasing while inequality in many countries is increasing.