See how to calculate the real GDP from nominal GDP and the deflator, then plot the series to find growth rates, expansion and contraction phases, peaks, troughs, and recessions.
The Business Cycle & Real GDP Growth Phase Plotter turns a series of GDP figures into a labeled business-cycle chart. Enter real GDP directly, or enter nominal GDP with the GDP deflator and the plotter deflates it for you using Real GDP = (Nominal GDP / GDP deflator) x 100.
Every period gets a period-over-period growth rate, a phase label (expansion, peak, contraction, trough), and a recession flag using the standard rule of two or more consecutive periods of negative real-GDP growth. The chart shades each phase, marks the turning points, and highlights recessions, with a step-by-step derivation underneath.
Divide nominal GDP by the GDP deflator and multiply by 100: Real GDP = (Nominal GDP / GDP deflator) x 100. The deflator is an index with the base year set to 100, so the result restates output in base-year prices and removes the effect of inflation.
The growth rate between two periods is (Real GDP this period - Real GDP last period) divided by Real GDP last period, times 100. The first period in a series has no growth rate because there is no earlier period to compare it with.
The common textbook rule is two or more consecutive periods of negative real-GDP growth. A single negative period is a contraction but not a recession, and a period of exactly zero growth does not count as negative.
A peak is the last period of an expansion, where real GDP stops rising and starts falling. A trough is the last period of a contraction, where it stops falling and starts rising. The first and last periods of a series can never be turning points because one side of the comparison is missing.
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