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The most constant economic series ever


Here at the FRED Blog, we often represent economic measures such as consumption or investment as a share of GDP. (For example, a recent post looked at the trade balance as a share of GDP.) We do this to account for general growth and inflation: Most macroeconomic measures grow over time because (1) the overall economy grows and (2) prices tend to increase. For many economic questions, what really matters is how economic measures relate to other measures, such as GDP. Now, when you add up all the components of GDP, you get GDP. This is exactly what we represent in the graph above, the share of GDP in GDP. This is an extremely important series to watch: If it deviates from its current trend, we know that something has gone terribly terribly wrong.

How this graph was created: Use the release tables on the percentage shares of GDP, select annual or quarterly (it doesn’t matter for this graph), and select GDP (the first line).

Suggested by Christian Zimmermann.

View on FRED, series used in this post: A191RE1A156NBEA


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