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# Tag Info

7

The change in base year keeps the dollar values meaningful to contemporary readers. If we still used, say, 1900 as the base year for US GDP, the dollar values for today would be so tiny they would essentially be meaningless 'GDP units', which would make it harder for people to visualize what the numbers really mean. Note that, when the base year changes, ...

3

In general, real output is calculated like this: $$RGDP_{t, b} = NGDP_t \cdot p_{base} / p_t$$ Where $NGDP_t$ is nominal GDP at time t, $p_t$ is the price level in time $t$ and $p_{base}$ is the price level in the base period. To covert RGDP between base periods, note that the ratio to a common year's $RGDP_t$ in two different base years is: RGDP_{t, b1} ...

3

It's just nominal GDP in year t, times (deflator in year 2000 / deflator in year t).

2

The change in base year is meant to give a more realistic picture of the change in price level in the economy. As time progresses, there are changes in people's disposable incomes, employment structure of the economy etc. If the base year is not revised to reflect the recent economy, we will not get an accurate picture of the economy today. Just to give ...

1

Updating of the base year is an indication of methodological changes in the way the national accounts are measured. This means two series with different base year (or reference year, as others call it) are strictly speaking not comparable over time. Here is the official document from the Central Statistics Office informing about the changes. As the document ...

1

In this paper, page 8, it says Quarterly seasonally adjusted nominal GDP and its deflator are constructed by Higgins and Zha (2015). That paper can be found here (google did not help to find this paper. I had to look for the personal website of one of the authors, here). This document states in section II.1, Step 1: Annual real GDP-va – ...

1

An alternative procedure would be to extrapolate the data for the most recent time backwards at the growth rate of the first set (earlier periods). By doing this, you do not have to rebase, adjust or splice the two sets. You will have the base year of the data for the most recent years (2004-5) and also will preserve the trend growth of the data for the ...

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Changing the base year of a time series is fine if you know what you're doing, check, for example the question: How do I change the base year of real GDP using the GDP deflator and nominal GDP? I'd, personally, use the real GDP series - you won't gain anything substantial with the mathematical conversion. It might be an useful exercise if you, for example, ...

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Changing the base year of index numbers shifts the level only, it does not alter the rates of growth. So, not true. If the rates of growth changed, this must have been due to revisions of the historical estimates of GDP. Can also stem from changes in the national accounting standards.

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I don't know what the Indian government's growth accounting practices are, but the World Bank has an independent forecast that shows India's GDP growth increasing in the near-term (pink area is a forecast): The source is here: http://data.worldbank.org/country/india, where you can get more detailed data.

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