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How Does Chain Weighting Lead to a Different Measurement of Real

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How does chain weighting lead to a different measurement of real GDP than the methods used by the BEA prior to 1996? What are the advantages of chain weighting? What are the disadvantages?


Definitions:

Operating Activities

Activities related to the core business functions of a company, including production, sales, and delivery of its products or services.

Net Income

The final earnings of a business once all costs and taxes are removed from the overall revenue.

Indirect Method

A way of reporting cash flows from operating activities in the statement of cash flows by adjusting net income for changes in balance sheet accounts.

Operating Activities

Activities that relate directly to the running of a business for profit, including production, sales, and distribution.

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