• JohnDClay@sh.itjust.works
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    3 months ago

    Inflation accounts for the price of actual goods. GDP tries to measure how much stuff you’re making. If you make the exact amount of stuff as last year but have 7% inflation, you’re GDP would grow by 7%. So to find out how much stuff a country is actually making, you use inflation adjusted real GDP.

    • ☆ Yσɠƚԋσʂ ☆@lemmy.mlOP
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      3 months ago

      That’s not what GDP measures. GDP measures profit companies are making, not the salaries employees get paid. Also, inflation does not directly correspond to the cost of living either. Again, please explain how in your mind Russia became a high income country if the economy is shrinking and inflation is outpacing wages. I eagerly await to see your reasoning.

      • welldraught@lemmy.ml
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        3 months ago

        Also does he mean yearly inflation, which is just reevaluated monthly? Whereas quarterly GDP growth? JohnDClay quarterly means four times a year. Furthermore single digit inflation is typically not considered as high. Also GDP growth does not necessarily talk of sucessful economic policy since there was strong decline before, but it does point to poor performance of sanctions.

          • welldraught@lemmy.ml
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            3 months ago

            Well there I would too disagree. His intuition was not completely wrong. Depending on what macroeconomic theory you like, gdp change and inflation are usually related. His interpretation was poor.