The main macroeconomic indicators include GDP and GNP (nominal and real), net national income, national wealth, personal disposable income. All of them show the level of economic condition of the country, society, citizens.
How is the ratio “nominal GNP - real GNP" measured and what is this concept? What is a deflator? This will be discussed in more detail below.
The concept
Before we talk about nominal, real indicators of GDP, we turn to the question of the very concept of gross national product. This is one of the main macroeconomic indicators. It is calculated as the aggregate of the final market value of all goods and services produced by citizens both domestically and abroad.
For example, a certain Russian company for the production of confectionery has production facilities both in Russia and abroad. The totality of the final market value from the sale of products manufactured at all enterprises of this company will be included in the overall GNP indicator. And goods produced at a factory inside Russia will only be included in GDP (gross domestic product).
Thus, gross national product is equal to: GDP plus the aggregate of goods produced by citizens outside the country. The concepts of "nominal GNP", "real GNP" will be discussed a little lower. Now we explain what the final cost of the goods is.
The concept of the final cost of goods
Each part, spare part from a car, glass, etc. can be sold on the market both in finished form, or as part of a more complex product, for example, a car.
In order for macroeconomic indicators to be as objective as possible, only the final cost of goods is taken into account. One of the methods for determining it in the domestic market is value added tax.
Example
For example, a tractor plant buys engines from another company. In this case, these products will not be taken into account in the volume of macroeconomic indicators. They will include only the amount from the sale of the tractor. But if a certain engine manufacturing plant sells the unit to the secondary market through an agricultural parts store, then its price will be included in both GDP and GNP.
Nominal and real indicators of GNP
Sometimes in the economy of a state, processes such as increased inflation, devaluation, denomination, etc. occur. As a rule, macroeconomic indicators are calculated in national currencies, although gross national product, of course, can be measured in arbitrary units. As inflation rises, money depreciates, which means that macroeconomic indicators, which should show the real state of affairs, need to be adjusted accordingly.
Let us give an example of wages about what nominal and real indicators are. Suppose, three years ago, a certain citizen received a salary of 30 thousand rubles at the rate of 30 rubles for one dollar. That is, in fact, his salary is equal to 1 thousand dollars. Today, his salary is also 30 thousand rubles. That is, this citizen nominally receives the same amount as before. However, today they can be purchased for less than $ 500. Given that a huge amount of goods in our country is from abroad, the prices in stores inevitably almost doubled. Consequently, the real wage of a citizen has become less than three years ago, despite the fact that the numbers (face value) on the banknotes have not changed.
A bunch of nominal GNP - real GNP has the same meaning. No matter what the numbers are today in macroeconomic indicators, it is important whether the situation in the economy has changed for the better.
Nominal and real GNP: GNP deflator
The deflator calculates the growth or decline in the level of the economy by measuring macroeconomic indicators for a certain period of time. It is calculated by the formula: the sum of the value of market prices for goods and services for the current year divided by the sum of the value of market prices for the reporting year. The result must be multiplied by one hundred percent.
All indicators below 100 will mean a fall in GNP, above 100 - growth.
Those who studied history know that the Communists, having come to power in 1917, compared all indicators of their development with the “blessed” year 1913. This year, indeed, the Russian Empire has become the world leader in all economic indicators. But only real indicators were compared: how much they collected, threshed, cast, etc. Then they rejected capitalism, and it was impossible to find out the monetary value of macroeconomic indicators.
Today everything has changed. In the world of capitalism, indicators are compared by expressing its value. No matter how much grain was threshed last year, it is important how much it was sold for.
When assessing macroeconomic indicators, a specific year is taken as the basis. As a rule, one of the most economically successful.
2007 is often taken as a basis. In order to calculate the growth or decline of gross national product, it is necessary to summarize the cost of goods and services for 2007 and divide it into indicators for 2008 (or any other for which we want to get a result). The resulting amount is multiplied by one hundred percent.
Example calculation of the GNP deflator
For example, the sum of all goods and services sold was 1 trillion. rubles for 2007 (conditional figures). In 2008, in connection with the crisis, it began to be 0.8. Thus, the GNP deflator will be calculated by the formula: (0.8 / 1) x 100 = 80.
That is, the 2008 GNP was 80% of the pre-crisis 2007.
But we get only indicators of the nominal volume.
To get real indicators, it is necessary to take into account inflation indicators and the exchange rate of official currencies (if macroeconomic indicators were taken into account in the national currency).
For example, in 2014, they paid about 35 rubles per dollar, in 2016, about 62 rubles (we will not particularly take into account the exact rate, only the essence is important to us). Key macroeconomic indicators are calculated in rubles (at least we are informed about this in the news feeds). GNP indicators for 2014 are approximately the same as in 2015 (if they have grown, then not by much).
Conditionally suppose that in 2014 and 2015, the volume of GNP was in the amount of 1 trillion. rubles, but with a significant devaluation and growth of the currency by 1 trillion. rubles we will buy dollars at the rate of 62 rubles per cu less by about 45% than at the rate of 35 p. for cu
Thus, the nominal indicator remained at the same level - 1 billion rubles, while real indicators fell by almost 45%.
Of course, all leading economists and politicians calculate gross national product indicators, as a rule, in dollars. In this case, the devaluation of the national currency will not play a special role in determining the real and nominal volume, only inflation that is observed in the dollar, according to the most rough estimates, amounts to 1%.
Thus, having completed all the necessary calculations, one can compare the nominal / real indicators of GNP and determine the true state of affairs in the economy.
Will there always be inflation?
But in what cases is the real GNP equal to the nominal GNP? This will happen with two indicators equal to zero:
- Inflation rate.
- The level of devaluation of the national currency in relation to the world. That is, this event seems impossible. Never, according to economists, in the modern capitalist world, nominal and real GNP will not be equal. Unless, of course, we take the nominal indicators in the year that was officially taken as the base. For example, if 2007 is taken as the basis, then the real and nominal indicators in it will be equal. But then we will not be able to understand the dynamics of economic development.
Output
So, we examined such concepts as nominal GNP, real GNP, and also determined the deflator formula, which allows determining the development of the country.
We hope that we have fully disclosed these concepts. Indeed, in the world of economic crises, it is necessary to navigate in basic economic concepts.