Do alternative measures of GDP affect its interpretation?

Bart Hobijn and Charles Steindel

Current Issues in Economics and Finance, 2009, vol. 15, issue Nov

Abstract: Gross domestic product's high correlation with unemployment and inflation makes it a key measure of the U.S. economy. Yet the somewhat arbitrary nature of the GDP construction process complicates interpretation and measurement of the indicator. A study of an alternative measure of GDP designed to address the published series' limitations finds that the adjusted measure differs in its representation of the long-term trend--but not the short-term fluctuations--of GDP. The published series' relevance as an indicator is therefore robust to some of the arbitrariness of its construction.

Keywords: Econometrics; Gross domestic product; Economic indicators (search for similar items in EconPapers)
Date: 2009
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