Real Economic Growth Rate


DEFINITION of 'Real Economic Growth Rate'

A measure of economic growth from one period to another expressed as a percentage and adjusted for inflation (i.e. expressed in real as opposed to nominal terms ). The real economic growth rate is a measure of the rate of change that a nation's gross domestic product (GDP) experiences from one year to another. Gross national product (GNP) can also be used if a nation's economy is heavily dependent on foreign earnings.

BREAKING DOWN 'Real Economic Growth Rate'

The real economic growth rate builds onto the economic growth rate by taking into account the effect that inflation has on the economy. The real economic growth rate is a "constant dollar" and is therefore a more accurate look at the rate of economic growth because it is not distorted by the effects of extreme inflation or deflation.

  1. Gross Domestic Product - GDP

    The monetary value of all the finished goods and services produced ...
  2. Inflation

    The rate at which the general level of prices for goods and services ...
  3. Boom

    A period of time during which sales of a product or business ...
  4. Gross National Product - GNP

    Gross National Product (or GNP) is an economic statistic that ...
  5. Deflation

    A general decline in prices, often caused by a reduction in the ...
  6. Macroeconomics

    The field of economics that studies the behavior of the aggregate ...
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