Since GDP is expressed in dollar terms, which are deflated by a dubious price deflator, it is obvious that the so called real GDP fluctuations mirror fluctuations in the amount of dollars pumped into the economy.
By pushing more money into the economy the central bank's actions would appear to be effective since real GDP will show a positive response to this pumping after a time lag.
Even if one were to accept that real GDP is not a fiction and depicts the so-called true economy there is still a problem as to why recessions are of a recurrent nature.
Rather than paying attention to the so-called strength of real GDP to ascertain where the economy is heading, it will be more helpful to pay attention to the growth rate of the money supply.
By following the growth rate of the money supply, one can ascertain the pace of damage to the real economy that central bank policies inflict.
Real GDP growth rate does not measure the real strength of an economy but rather reflects monetary turnover adjusted by a dubious statistic called the price deflator.
By means of the real GDP statistic Fed policy makers and government officials can create an illusion that they can grow the economy.
https://www.zerohedge.com/news/2019-09-03/how-gdp-measures-help-create-illusion-money-pumping-grows-economy
By pushing more money into the economy the central bank's actions would appear to be effective since real GDP will show a positive response to this pumping after a time lag.
Even if one were to accept that real GDP is not a fiction and depicts the so-called true economy there is still a problem as to why recessions are of a recurrent nature.
Rather than paying attention to the so-called strength of real GDP to ascertain where the economy is heading, it will be more helpful to pay attention to the growth rate of the money supply.
By following the growth rate of the money supply, one can ascertain the pace of damage to the real economy that central bank policies inflict.
Real GDP growth rate does not measure the real strength of an economy but rather reflects monetary turnover adjusted by a dubious statistic called the price deflator.
By means of the real GDP statistic Fed policy makers and government officials can create an illusion that they can grow the economy.
https://www.zerohedge.com/news/2019-09-03/how-gdp-measures-help-create-illusion-money-pumping-grows-economy
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