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I've been facing a problem at work, mostly relating to 'real' values of economic measure.Ok, so we know that real GDP accounts for increases due to inflation. But why do we use constant prices of goods to measure real GDP growth? How do we account for increases in real price that is not due to inflation using that method?Now the problem I?m facing at work is trying to derive the real growth in exports-imports to include in the real GDP calculation, now the nominal imports for my country for oil has dropped in half because of the cut in prices of barrels, but the quantity has remained flat. Now how do I account for that ?growth? in import lines. Do I use 0% in real imports for oil because the quantity hasn't changed at the same price last year? Or do I drop the real growth by half (as nominal) because the price cut was not due to deflation?I?d appreciate any help on real GDP and real trade balance.

Read this. In short, for calculating real exports and imports BEA use export/import deflation indices. If those indices are not available, they use local inflation measures. Petroleum falls into group of products that they price directly with energy prices. BoJ has a similar approach.

So if I remove the effects of the drop in crude oil by 25% (for example) during a certain quarter by readjusting the current import nominal value upwards, then I get the real import value for petroleum products?

First of all real GDP doesnt account for increase in inflation, its the nominal gdp which account for inflation. Nominal GDP= Real GDP+Inflation.We use constant prices of goods to measure reaL gdp growth because we actually want to measure increase in production/increase in value of goods and services of all products assuming prices remains same as compared to base year. Eg a company (country) produce X quantity of goods at Y prices in last year(assume last year in base year). Next year company produce x+dx quantity at prices Y. So Real GDP growth is dx *Y in a year where as nominal GDP is (x+dx)* Y. To derive export and import, assuming quantity remained same and take 25% fall in oil prices, u can roughly calculate oil export/import which you can use in nominal GDP and from Nominal GDP u can calculate real GDP. using GDP deflator. Nominal GDP= Real GDP* GDP deflator.I hope it helps.