This is Why GDP Paints a Misleading Picture
Channel: The Nomad Economist
Date: 21/04/2021

This is Why GDP Paints a Misleading Picture
Between January 1970 and December 2020 on average changes in money supply preceded changes in real economic activity by fourteen months, as depicted by real gross domestic product (GDP). Based on this it is tempting to suggest that a strengthening in the growth rate of money supply will result in the strengthening of real economic growth. Conversely, a weakening in the growth rate of money supply will set in motion a decline in real economic activity.




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