Category: Charts

Chart of the Every Other Tuesday – American Hysteresis

GDP is long used as an indicator of the strength of the economy. If real GDP, that is, the country’s gross domestic product that has been adjusted for inflation, goes up, the economy has grown. Yippie. By this yard stick, the United States has grown considerably since the great recession. Unfortunately, a direct linear graph does not tell the whole story about how the economy is growing over time. We can obtain a clearer picture by looking at the log of GDP over time.