Hi everyone, I'm a software engineer, not an economist, but I'm genuinely curious and enjoy digging into all kinds of rabbit holes. This time, influenced by the rapidly rising price of gold, I looked into the comparison between US nominal GDP and the nominal price of gold in their respective years.
Here’s what I’ve got: https://imgur.com/a/K0pGcCM
It’s probably a naive comparison—if so, I’d like to learn why. And if not – what are the implications of the fact that a factory worker in 1913 was earning >$200k/year in gold equivalent.
Thank you!
What does comparison between US Nominal GDP and Gold-Adjusted GDP (1850–Present) tell us?
byu/kulikalov inAskEconomics
Posted by kulikalov
1 Comment
Gold prices fluctuate a lot which creates a lot of “noise” (i.e. those large spikes and drops seen in your chart) resulting in it being a poor item to measure GDP in with even more problems than just measuring in nominal dollars as gold prices [still have large fluctuations even after adjusting for inflation](https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart).
If your intent was to try to measure in terms that are less impacted by inflation I don’t know why you wouldn’t just use [Real GDP](https://www.multpl.com/us-gdp-inflation-adjusted/table/by-year) instead of an asset like gold that fluctuates so much.