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But at least Nominal GDP is a well-defined concept, in principle, even if it is hard to quantify.

For the thermodynamics buffs, this makes Nominal GDP Growth an exact differential, but Real GDP Growth and Inflation are inexact differentials. This means Nominal GDP is a "state variable" and path-independent, but Real GDP and the GDP Deflator are path-dependent and not state variables.

We have met the enemy, and it is us — Pogo

by Carrie (migeru at eurotrib dot com) on Thu Oct 11th, 2007 at 07:02:04 AM EST
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