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I have a dataset containing Venezuela's nominal GDP, real GDP, GDP deflator and population from 1997 to 2013. I am interested in calculating real GDP per capita, but the base year of the GDP deflator is 1997=100, which is the current base year used by Venezuela's Central Bank in all the national accounts.

Would it be correct to change the deflator's base year to 2010=100 in order to recalculate real GDP?

Or should I just use real GDP reported by the Central Bank even though the base year is outdated?

luchonacho
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L. Simone
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1 Answers1

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Changing the base year of a time series is fine if you know what you're doing, check, for example the question: How do I change the base year of real GDP using the GDP deflator and nominal GDP?

I'd, personally, use the real GDP series - you won't gain anything substantial with the mathematical conversion. It might be an useful exercise if you, for example, were to compare GDP growth in two different countries and would like the base year to be the same.

Community
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John L.
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  • Thank you. Yes, I want to estimate a simple tourism demand model for several destinations, and some of the explanatory variables are Venezuela's real GDP per capita, and relative prices at the destinations which is just the ratio of the CPI in the destination to the CPI in Venezuela. And for every single country, including Venezuela, the base year for the CPI is 2010=100, which is why I thought that the GDP per capita should have the same base year. – L. Simone Jan 07 '16 at 16:14