Consistent Level Aggregation and Growth Decomposition of Real GDP

Added Title

DLSU-AKI Working Paper Series 2014-008

Authors

Jesus C. Dumagan, De La Salle University, ManilaFollow

College

School of Economics

Department/Unit

Economics

Document Type

Working Paper

Publication Date

10-9-2014

Abstract

This paper formulates a general framework for consistent level aggregation and growth decomposition of real GDP. However, the focus is on US GDP in chained prices based on the Fisher index since this GDP motivated this paper’s purposes. These are to explain why problematic residuals‒in contributions to US GDP level and growth “not allocated by industry”‒ show up in the existing framework by the Bureau of Economic Analysis and, therefore, to propose an alternative framework for consistent level aggregation and growth decomposition where residuals cannot arise. This paper’s residual-free framework applies to real GDP regardless of the underlying indexes, i.e., to GDP either in chained prices or in constant prices.

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Recommended Citation

Dumagan, J. C. (2014). Consistent Level Aggregation and Growth Decomposition of Real GDP. Retrieved from https://animorepository.dlsu.edu.ph/res_aki/52

Disciplines

Growth and Development

Keywords

Real GDP; relative prices; index numbers; aggregation; additivity

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