Nominal Income and the Inflation-Growth Divide

Nominal Income and the Inflation-Growth Divide

A fundamental issue in macroeconomics concerns the decomposition of nominal income into its price and output components or, in the usage of this paper, the decomposition of nominal income growth into its inflation and output growth components. Several controversial solutions have been proposed. Howe...

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description A fundamental issue in macroeconomics concerns the decomposition of nominal income into its price and output components or, in the usage of this paper, the decomposition of nominal income growth into its inflation and output growth components. Several controversial solutions have been proposed. However, despite the increase in the power and sophistication of statistical test procedures, it is still not possible to discriminate conclusively between these seemingly very different theories.2
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