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# RE: st: How to Convert Nominal GDP to Real GDP

 From "Lovisa Persson" To Subject RE: st: How to Convert Nominal GDP to Real GDP Date Fri, 21 Sep 2012 10:44:08 +0200

Hello!

Is your variable CPI an index with value 100 or 1 at base year 2000?

In that case you do what Lukas recommended.

If the CPI is in rate of change from year to year,  you first need to
generate a price index variable with base year 2000 , and THEN you do what
the previous responder told you.

generate index=1
replace index=1+cpi if year==2001

and then you impute the rest of the values...

replace index=(cpi2001+1)*(cpi2002+1) if year==2002
replace index= (cpi2001+1)*(cpi2002+1)* (cpi2003+1) if year==2003

You impute the actual values of the CPI in rate of change...

Now you have an index which you can use to generate your Real GDP variable.
Using your nominal GDP variable and divide it by the index just as described
below.

Lovisa

-----Original Message-----
From: owner-statalist@hsphsun2.harvard.edu
[mailto:owner-statalist@hsphsun2.harvard.edu] On Behalf Of Lukas Borkowski
Sent: den 21 september 2012 09:54
To: statalist@hsphsun2.harvard.edu
Subject: Re: st: How to Convert Nominal GDP to Real GDP

Hello Shawn,

the answer would be -gen realgdp = gdp/cpi-

Regards,

Lukas

#
Lukas Borkowski

Am 21.09.2012 um 06:56 schrieb Shawn Meyer:

> Dear Statalisters,
> I am new user to STATA. I am requesting if you could teach me something
which sounds very simple. I have a panel data on GDP of over 100 countries
for 10 years; from 2000 to 2010 with four variables id, year, GDP and CPI.
Now I want to generate a new variable REALGDP so that I get real GDP for
to do it?
> Thank you.
> Shawn
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