Real versus nominal value

The term real size referred to in the economics an adjusted nominal value (nominal size). There are different definitions in the fields of economics and finance.

Economics

In economics refers to a real size one to price evolutions adjusted variable ( adjusted for inflation ). Examples of real variables are:

• Real gross domestic product ( GDP), an adjusted for inflation value of ( nominal ) GDP. In contrast to the nominal GDP, which is created in the prices of the respective collection period ( at market prices), real GDP using price indices is calculated using the prices of a fixed base year. The aim is to determine the change in benefits actually created and changes that arise due to price fluctuations filter out. This is necessary to ensure the comparability of the figures over several years.
• The real interest rate, ie, adjusted for inflation nominal interest rate ( nominal interest rate ). In other words, it corresponds to " the nominal interest rate minus the inflation rate .": 622
• The real wage, ie the wage relative to the general price level. The real wage, ie the purchasing power of the work done will be considered in connection with the price trend, whereby the actual wage developments should be transparent.
• Real unit labor costs

The media in changes in GDP usually the real value, on the other hand indicated the nominal change in wages.

Financing

In financial theory called the real size, similar in Economics, an adjusted value. This is particularly the case of debt ratios of interest. For example, the yield on bonds is reported as interest rate from the nominal value (usually 100 monetary units ), which means that the annual interest payment is independent of the actual issue price or purchase price, but by the securitized in the document face value (also called here the nominal interest rate ). The issue price or purchase price may, however, partly strongly deviate from the nominal value ( the extreme case, zero coupon bond or zero bond without interest) which affects the actual, or real interest rate over the term. It also speaks of the effective interest rate, or yield. In the reverse case, of taking a loan, the agreement of a discount (also Damnum ) on the real interest rate affects.