this post was submitted on 26 Jul 2024
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No it doesn't, inflation and economic growth aren't directly related. Russian economic growth has been around 5% https://www.statista.com/statistics/276951/gross-domestic-product-gdp-growth-rate-in-russia-by-quarter/
But if you aren't using real GDP (inflation adjusted) than the numbers are largely useless, especially in cases of high inflation like Russia.
if you aren’t using real GDP (inflation adjusted)
You have to look at inflation in relation to wages, not GDP. How is it that you're unable to understand such basic things? If the cost of living was outpacing salaries in Russia, please explain to me why the World Bank has just reclassified Russia as a high income country. I'm very curious to hear more about this new fangled economic theory you subscribe to. https://blogs.worldbank.org/en/opendata/world-bank-country-classifications-by-income-level-for-2024-2025
Inflation accounts for the price of actual goods. GDP tries to measure how much stuff you're making. If you make the exact amount of stuff as last year but have 7% inflation, you're GDP would grow by 7%. So to find out how much stuff a country is actually making, you use inflation adjusted real GDP.
That's not what GDP measures. GDP measures profit companies are making, not the salaries employees get paid. Also, inflation does not directly correspond to the cost of living either. Again, please explain how in your mind Russia became a high income country if the economy is shrinking and inflation is outpacing wages. I eagerly await to see your reasoning.
Also does he mean yearly inflation, which is just reevaluated monthly? Whereas quarterly GDP growth? JohnDClay quarterly means four times a year. Furthermore single digit inflation is typically not considered as high. Also GDP growth does not necessarily talk of sucessful economic policy since there was strong decline before, but it does point to poor performance of sanctions.
Exactly, these are completely separate concepts that have no direct relationship with one another.
Well there I would too disagree. His intuition was not completely wrong. Depending on what macroeconomic theory you like, gdp change and inflation are usually related. His interpretation was poor.
They're not directly related though, we often see growing GDP along with growing inflation. It's a perfectly normal scenario.