Real Gross Domestic Income, Relative Prices and Economic Performance Across the OECD
AbstractThis paper uses Organisation for Economic Co-operation and Development (OECD) data to examine changes in labour productivity, real gross domestic product (GDP), 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 after 2002.
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Bibliographic InfoPaper provided by Statistics Canada, Analytical Studies Branch in its series Economic Analysis (EA) Research Paper Series with number 2010059e.
Date of creation: 28 Jan 2010
Date of revision:
Economic accounts; Gross domestic product; Productivity accounts;
Other versions of this item:
- Ryan Macdonald, 2010. "Real Gross Domestic Income, Relative Prices, And Economic Performance Across The Oecd," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(3), pages 498-518, 09.
- NEP-ALL-2010-02-13 (All new papers)
- NEP-LAM-2010-02-13 (Central & South America)
- NEP-OPM-2010-02-13 (Open Economy Macroeconomics)
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- Andreas Benedictow & Pål Boug, 2014. "Calculating the real return of the Norwegian Government Pension Fund Global by alternative measures of the deflator," Discussion Papers 775, Research Department of Statistics Norway.
- Peter Sheehan & Robert G. Gregory, 2013.
"The Resources Boom and Economic Policy in the Long Run,"
Australian Economic Review,
The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 46(2), pages 121-139, 06.
- 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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