Frequently Asked Questions

Guidelines for Citing BEA Information | ID: 79 | Created: Dec-06-2005
Answer

How do I use chain-type indexes (or chained-dollar) measures of economic activity, such as real GDP?

Use real (chain-type indexes or chain-dollar) estimates when you want to show how output or spending has changed over time. The percent changes in quantity indexes exactly match the percent changes in chained dollars, so they can be used interchangeably for making comparisons. Real estimates remove the effects of price changes, which can obscure changes in output or spending in current dollars. Examples of the use of real estimates include:

  • The U.S. economy grew at an annual rate of 3.6 percent in the fourth quarter of 2003 after increasing 7.2 percent in the third quarter. (These percent changes may be found in table 1 of the GDP news release and in table 1.1.1 of the NIPA tables.)
  • Business investment in information technology increased 5.1 percent in 2003 after decreasing 4.7 percent in 2002. (These percent changes may be computed from information found in table 3 of the GDP news release and in table 5.3.3 (or table 5.3.6) of the NIPA tables.)
  • During the first three quarters of 2001, when the economy was in recession, real GDP decreased 0.1 percent. (Such percent changes may be computed from information found in table 1.1.3 (or table 1.1.6) of the NIPA tables.)
  • Over the past 10 years, the PCE price index for medical care increased at an average annual rate of 3.0 percent. (Such percent changes may be computed from information found in table 2.3.4 of the NIPA tables.)

National Income and Product Accounts Tables (NIPA)

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