real values

real values

the value of an asset, wage, profit, etc. adjusted for changes in the level of prices (particularly INFLATION) over time; that is, expressing the value in terms of constant prices not current money prices. Thus, while workers' money wages may have increased due to inflation, giving the appearance that they are now better off, their real wage may well have remained the same; i.e. if wages go up at exactly the same rate as inflation, the PURCHASING POWER of that wage (the real wage) remains unchanged; if money wages go up by less than the rate of inflation then real wages will fall. See INFLATION ACCOUNTING. Compare with NOMINAL VALUES.

Fig. 166 Real values.

real values

the measurement of an economic aggregate (for example GROSS DOMESTIC PRODUCT) corrected for changes in the PRICE LEVEL over time, that is, expressing the value in terms of constant prices. Thus, Fig. 166 shows that the UK's GDP in real terms has risen more slowly since 1997 than shown by the current INFLATION-affected GDP data. See GNP DEFLATOR.