Current Issues in Economics and Finance
Chain-Weighting: The New Approach to Measuring GDP
December 1995 Volume 1, Number 9
JEL classification: O47, E00

Author: Charles Steindel

Recent dramatic changes in the U.S. economy's structure have compelled BEA to revise the way in which it measures real GDP levels and growth. By switching to a chain-weighted method of computing aggregate growth—which relies heavily on current price information—BEA will be able to measure GDP growth more accurately by eliminating upward biases in the incoming data.

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