A Refined Model to Predict Near-Term US Real GDP Growth

Abstract

The Gross Domestic Product (GDP) is defined as the monetary value of all the finished goods and services produced within a country's borders in a specific time period. Real GDP (RGDP) is GDP adjusted for the cost of living and is computed as Nominal GDP divided by a deflator. It is largely taken to be a measure of the economy of a country’s well-being, while year over year percentage changes in the RGDP measure economic growth (RGDPG. This research investigates the possibility that, in addition to trend, inflation may be a determinant of RGDPG. Specially, inflation is found to be a leading determinant having a negative influence.