Decomposition of GDP. The Role of Quality of Goods and Services in Measuring Economic Growth
15 Pages Posted: 5 Jun 2018 Last revised: 9 Nov 2018
Date Written: April 30, 2018
A number of studies, mostly on the US economy, have shown that real GDP growth could be underestimated due to the imperfect accounting of quality changes of goods and services. Moreover, GDP growth as the indicator reflecting the aggregate growth of the output of the economy does not enable one to analyse the impacts of the quality changes in goods and services on the development of the economy. To overcome these issues, this paper substantiates the expediency and ability of the division of GDP growth in two components: the growth of qualitative GDP and the growth of quantitative GDP.
Keywords: GDP growth, GDP deflator, quality adjustment, qualitative GDP, GDP measurement
JEL Classification: C82, E31, E01
Suggested Citation: Suggested Citation