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Abstract

A strong understanding of calculating and interpreting percentage changes and growth rates is critically important for economists. This is because many fundamental concepts such as the time value of money, and many commonly reported economic measures, such as the rate of return on assets, price inflation, and measures of economic growth, require a firm understanding of percentage changes. This paper presents a brief primer on calculating and interpreting percentage changes and growth rates. The purpose is to illuminate these measures, facilitate their interpretation, and clarify their usage for economic analysis.

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