GDP and GNP Are Discrete Economic Time Series, Not Models

Summary

The document clarifies that GDP and GNP are measured economic time series rather than economic models. Although the question notes that annual observations are discrete, the answer explains that the series may also be available at other frequencies, including quarterly. When higher-frequency observations are unavailable, interpolation such as a cubic spline can generate intermediate values for analysis or display.

A plotted line may look continuous because software connects observed points, but that visual continuity does not turn the underlying observations into a continuous function. Interpolated values are estimates between observations, not new measurements. The discussion is conceptual and does not assess interpolation accuracy or explain when a particular method is appropriate; frequency and interpolation choices depend on the intended use of the data.

Key ideas

• GDP and GNP are economic time series, not economic models.
• National accounts data can be reported at different frequencies, including quarterly.
• Interpolation can produce intermediate values when a finer frequency is needed.
• A continuous-looking chart does not mean the underlying observations form a continuous function.
• Interpolated points should not be confused with observed data.

Tags

# GNP/GDP and modelling


# GNP/GDP and modelling












Is GNP a continuous, static or a dynamic model ? What about GDP ? What I do know is that it has yearly discrete values. However, when it is modeled, it becomes a continuous graph. So what exactly is the answer ?

## Answer by Quantopik (score 2)

https://quant.stackexchange.com/a/11443

First of all, GNP and GDP are economic time series and they are not economic model.

Secondly, you can also get these time series with different frequency, as quarterly data, avalaible on OECD website. In the case you need for lower frequency data you can get it by interpolation (as, for instance, the cubic spline interpolation); This is the Matlab tutorial for conducting the cubic spline interpolation.

Lastly, as regards the graph you did, I am not sure to underastand completely your question; anyway, it is continuous simply because the software link all time series points together in the graph, but this doesn't mean that you have a continuous function; you have a continuous graph that describe a discrete function.

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