Calculating GDP Growth Rates
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A whiteboard video showing how to calculate GDP Growth Rates, GDP in "N" number of years, and the Rule of 70.
Comments
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what is this formula for [1 + g/1+p]-1 its in my book to calculate economic growth.
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Jessica, the rule of 72 is used sometimes, however, more recently I have seen economists and financial advisors
preferring rule of 70. Technically, both will be fairly accurate as far as quick estimate. Here are links defining both:
http://en.wikipedia.org/wiki/Rule_of_72
http://www.investopedia.com/terms/r/rule-of-70.asp
http://economics.about.com/od/gross-domestic-product/ss/Economic-Growth-and-the-Rule-of-70.htm -
Yes, you can use both this Growth formula for Real and Nominal, however, we don't like Nominal because of it not accounting for inflation.
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Isn't it suppose to be the rule of 72?
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Would you use this same formula to calculate the nominal growth between years?
15m 37sLenght
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