Real Gross Domestic Income, Relative Prices, And Economic Performance Across The Oecd
AbstractThis paper uses OECD data to examine changes in labor productivity, real gross domestic product (GDP) and real gross domestic income (GDI), economic aggregates, and relative economic growth over time. Real GDI combines changes in production (real GDP) with a trading gain derived from relative price changes. The paper considers two sources of trading gains: the terms of trade, and the real exchange rate. For OECD countries, the terms of trade is the more important price ratio, making a contribution to real income growth that is, on average, an order of magnitude larger than the real exchange rate. Over long time periods, the most important source of real income growth is changes in production. Over shorter time horizons, however, the trading gain can make noteworthy contributions. Changes in aggregates like real private consumption, or the relative economic performance of nations, are shown to be particularly dependent on the trading gain during the large swings in resource prices that occurred post-2002. Copyright 2010 The Author. Review of Income and Wealth 2010 International Association for Research in Income and Wealth.
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Bibliographic InfoArticle provided by International Association for Research in Income and Wealth in its journal Review of Income and Wealth.
Volume (Year): 56 (2010)
Issue (Month): 3 (09)
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- Macdonald, Ryan, 2010. "Real Gross Domestic Income, Relative Prices and Economic Performance Across the OECD," Economic Analysis (EA) Research Paper Series 2010059e, Statistics Canada, Analytical Studies Branch.
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- Peter Sheehan & Bob Gregory, 2013. "The Resources Boom and Economic Policy in the Longer Run," CEPR Discussion Papers 683, Centre for Economic Policy Research, Research School of Economics, Australian National University.
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