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This subject is about GDP.A region's gross domestic product, or GDP, is one of the ways for measuring the size of its economy. The GDP of a country is defined as the total market value of all final goods and services produced within a country in a given period of time (usually a calendar year). It is also considered the sum of value added at every stage of production (the intermediate stages) of all final goods and services produced within a country in a given period of time. Until the 1992 the term GNP or gross national product was used in the United States. The two terms GDP and GNP are almost identical - and yet entirely different; GDP (or GDI - Gross Domestic Income) being concerned with the region in which income is generated. That is, what is the market value of all the output produced in a nation, the United States, for example, in one year. GDP concerns itself with where the output is produced and not who produced it. Meanwhile, GNP (or GNI - Gross National Income) is a measure of the accrual of income or the value of the output, produced by the "nationals" of a region. GNP concerns itself with who "owns" the production. If we take the USA as an example again, GNP measures the value of output produced by American firms, regardless of where the firms are located. This compares to GDP which is concerned with where the production takes place and not if the company is an American firm or not. Supposing that a firm can be defined as American in an economic world where most large firms are actually global groups.
{{Redirect|GDP|other uses|GDP (disambiguation)}}


The most common approach to measuring and understanding GDP is the expenditure method:
[[File:Gdp nominal and ppp 2005 world map single colour.png|thumb|250px|right|[[CIA World Factbook]] 2005 figures of total [[Real versus nominal value (economics)|nominal]] GDP (top) compared to [[Purchasing power parity|PPP]]-adjusted GDP (bottom)]]


GDP = consumption + investment + (government spending) + (exports − imports), or, GDP = C + I + G + (X-M)
[[Image:BNP perhoofd 2011.PNG|thumb|right|250px|Countries by 2011 GDP (nominal) per capita<ref>Based on the IMF figures (2010-2011). If no number was available for a country from IMF, CIA figures (2010-2011) were used.</ref>
"Gross" means depreciation of capital stock is not included. With depreciation, with net investment instead of gross investment, it is the net domestic product. Consumption and investment in this equation are the expenditure on final goods and services. The exports minus imports part of the equation (often called cumulative exports) then adjusts this by subtracting the part of this expenditure not produced domestically (the imports), and adding back in domestic area (the exports).
{|width="100%"
|-
| valign=top | {{legend|#400000|over $102,400}} {{legend|#800000|$51,200–102,400}} {{legend|#a00000|$25,600–51,200}} {{legend|#d00000|$12,800–25,600}} {{legend|#fd2a00|$6,400–12,800}} {{legend|#fe7733|$3,200–6,400}}
| valign=top | {{legend|#fea933|$1,600–3,200}} {{legend|#fed24c|$800–1,600}} {{legend|#feff33|$400–800}} {{legend|#ffffa6|below $400}} {{legend|white|unavailable}}
|}
]]


Economists (since Keynes) have preferred to split the general consumption term into two parts; private consumption, and public sector (or government) spending. Two advantages of dividing total consumption this way in theoretical macroeconomics are:
[[File:GDP PPP Per Capita IMF 2008.png|thumb|250px|right|[[List of countries by GDP (PPP) per capita|GDP (PPP) per capita]]]]
'''Gross domestic product''' ('''GDP''') is the [[market value]] of all officially recognized final goods and services produced within a country in a given period of time. GDP [[per capita]] is often considered an indicator of a country's [[standard of living]];<ref>{{cite book | last = O'Sullivan | first = Arthur}}</ref><ref>[http://www.guardian.co.uk/business/2009/sep/14/sarkozy-attacks-gdp-focus French President seeks alternatives to GDP], [[The Guardian]] 14-09-2009.<br/>{{PDFlink|[http://www.beyond-gdp.eu/download/bgdp-bp-goossens.pdf European Parliament, Policy Department Economic and Scientific Policy: Beyond GDP Study]|1.47&nbsp;MB}}</ref> GDP per capita is not a measure of personal income (''See [[Gross domestic product#Standard of living and GDP|Standard of living and GDP]]''). Under economic theory, GDP per capita exactly equals the gross domestic income (GDI) per capita (''See [[Gross domestic income]]'').


Private consumption is a central concern of welfare economics. The private investment and trade portions of the economy are ultimately directed (in mainstream economic models) to increases in long-term private consumption.
GDP is related to [[national accounts]], a subject in [[macroeconomics]]. GDP is not to be confused with [[gross national product]] (GNP) which allocates production based on ownership.
If separated from endogenous private consumption, government consumption can be treated as exogenous, so that different government spending levels can be considered within a miraculous piece of a frame

==History==
{{Expand section|date=March 2011}}

GDP was first developed by [[Simon Kuznets]] for a [[United States Congress|US Congress]] report in 1934.<ref name="kuznets">Congress commissioned Kuznets to create a system that would measure the nation's productivity in order to better understand how to tackle the [[Great Depression]].
Simon Kuznets, 1934. "National Income, 1929–1932". 73rd US Congress, 2d session, Senate document no. 124, page 5-7. http://fraser.stlouisfed.org/docs/publications/nipab/19340104_nationalinc.pdf
</ref> In this report, Kuznets warned against its use as a measure of welfare (see below under ''limitations and criticisms''). After the [[Bretton Woods conference]] in 1944, GDP became the main tool for measuring a country's economy.<ref>{{cite web|last=Dickinson|first=Elizabeth|title=GDP: a brief history|url=http://www.foreignpolicy.com/articles/2011/01/02/gdp_a_brief_history|publisher=ForeignPolicy.com|accessdate=25 April 2012}}</ref>

==Determining GDP==
{{Economics sidebar}}

GDP can be determined in three ways, all of which should, in principle, give the same result. They are the product (or output) approach, the [[income approach]], and the expenditure approach.

The most direct of the three is the product approach, which sums the outputs of every class of enterprise to arrive at the total. The expenditure approach works on the principle that all of the product must be bought by somebody, therefore the value of the total product must be equal to people's total expenditures in buying things. The income approach works on the principle that the incomes of the productive factors ("producers," colloquially) must be equal to the value of their product, and determines GDP by finding the sum of all producers' incomes.<ref>World Bank, Statistical Manual >> National Accounts >> [http://web.worldbank.org/WBSITE/EXTERNAL/DATASTATISTICS/EXTDECSTAMAN/0,,contentMDK:20882526~menuPK:2648252~pagePK:64168445~piPK:64168309~theSitePK:2077967~isCURL:Y,00.html GDP–final output], retrieved October 2009.<br/>
{{cite web | title=User's guide: Background information on GDP and GDP deflator | publisher = HM Treasury | url=http://www.hm-treasury.gov.uk/data_gdp_backgd.htm }}<br/>{{cite web | title=Measuring the Economy: A Primer on GDP and the National Income and Product Accounts | publisher=Bureau of Economic Analysis | url=http://www.bea.gov/national/pdf/nipa_primer.pdf |format=PDF}}</ref>

Example: the expenditure method:
: ''GDP = [[consumption (economics)|private consumption]] + [[Gross private domestic investment|gross investment]] + [[government spending]] + ([[export]]s − [[import]]s)'', or

<blockquote><math>GDP = C + I + G + \left ( X - M \right )</math></blockquote>

<blockquote>'''Note:''' "Gross" means that GDP measures production regardless of the various uses to which that production can be put. Production can be used for immediate consumption, for investment in new fixed assets or inventories, or for replacing depreciated fixed assets.
<!--THIS IS NOT CLEARLY STATED: If depreciation of fixed assets is subtracted from GDP, the result is called the [[Net domestic product]]; it is a measure of how much product is available for consumption or adding to the nation's wealth. Production used by industries for further production, called "intermediate demand" is not included.-->

"Domestic" means that GDP measures production that takes place within the country's borders. In the expenditure-method equation given above, the exports-minus-imports term is necessary in order to null out expenditures on things not produced in the country (imports) and add in things produced but not sold in the country (exports).</blockquote>

[[Economist]]s (since [[John Maynard Keynes|Keynes]]) have preferred to split the general consumption term into two parts; private consumption, and [[public sector]] (or government) spending.{{Citation needed|date=August 2011}} Two advantages of dividing total consumption this way in theoretical [[macroeconomics]] are:
* '''Private consumption''' is a central concern of [[welfare economics]]. The private investment and trade portions of the economy are ultimately directed (in mainstream economic models) to increases in long-term private consumption.
* If separated from [[Endogeneity (economics)|endogenous]] private consumption, '''government consumption''' can be treated as [[Exogeny|exogenous]],{{Citation needed|date=March 2008}} so that different government spending levels can be considered within a meaningful macroeconomic framework.

===Production approach===
" Market value of all final goods and services calculated during 1 year . "

The production approach is also called as Net Product or Value added method. This method consists of three stages:
# Estimating the Gross Value of domestic Output in various economic activities;
# Determining the intermediate consumption, i.e., the cost of material, supplies and services used to produce final goods or services; and finally
# Deducting intermediate consumption from Gross Value to obtain the Net Value of Domestic Output.

Symbolically,

Net Value Added = Gross Value of output – Value of Intermediate Consumption.
Value of Output = Value of the total sales of goods and services + Value of changes in the inventories.

The sum of Net Value Added in various economic activities is known as '''GDP at factor cost'''.

GDP at factor cost plus indirect taxes less subsidies on products is '''GDP at Producer Price.'''

For measuring gross output of domestic product, economic activities (i.e. industries) are classified into various sectors. After classifying economic activities, the gross output of each sector is calculated by any of the following two methods:
# By multiplying the output of each sector by their respective market price and adding them together and
# By collecting data on gross sales and inventories from the records of companies and adding them together

Subtracting each sector's intermediate consumption from gross output, we get sectoral Gross Value Added (GVA) at factor cost. We, then add gross value of all sectors to get '''GDP at factor cost'''. Adding indirect tax minus subsidies in GDP at factor cost, we get '''GDP at Producer Prices'''.

===Income approach===

" sum total of incomes of individuals living in a country during 1 year ."

Another way of measuring GDP is to measure total income. If GDP is calculated this way it is sometimes called Gross Domestic Income (GDI), or GDP(I).
GDI should provide the same amount as the expenditure method described below. (By definition, GDI = GDP. In practice, however, measurement errors will make the two figures slightly off when reported by national statistical agencies.)

This method measures GDP by adding incomes that firms pay households for factors of production they hire- wages for labour, interest for capital, rent for land and profits for entrepreneurship.

The US "National Income and Expenditure Accounts" divide incomes into five categories:
# Wages, salaries, and supplementary labour income
# Corporate profits
# Interest and miscellaneous investment income
# Farmers’ income
# Income from non-farm unincorporated businesses
These five income components sum to net domestic income at factor cost.

Two adjustments must be made to get GDP:
# Indirect taxes minus subsidies are added to get from factor cost to market prices.
# Depreciation (or [[Capital Consumption Allowance]]) is added to get from net domestic product to gross domestic product.

Total income can be subdivided according to various schemes, leading to various formulae for GDP measured by the income approach. A common one is:

: ''GDP = [[compensation of employees]] + [[gross operating surplus]] + [[gross mixed income]] + taxes less subsidies on production and imports''
: '''GDP''' = '''COE''' + '''GOS''' + '''GMI''' + '''T<sub>P & M</sub>''' – '''S<sub>P & M</sub>'''
* '''Compensation of employees''' (COE) measures the total remuneration to employees for work done. It includes wages and salaries, as well as employer contributions to [[social security]] and other such programs.
* '''Gross operating surplus''' (GOS) is the surplus due to owners of incorporated businesses. Often called [[Profit (accounting)|profits]], although only a subset of total costs are subtracted from [[gross output]] to calculate GOS.
* '''Gross mixed income''' (GMI) is the same measure as GOS, but for unincorporated businesses. This often includes most small businesses.

The sum of '''COE''', '''GOS''' and '''GMI''' is called total factor income; it is the income of all of the factors of production in society. It measures the value of GDP at factor (basic) prices. The difference between basic prices and final prices (those used in the expenditure calculation) is the total taxes and subsidies that the government has levied or paid on that production. So adding taxes less subsidies on production and imports converts GDP at [[factor cost]] to GDP(I).

Total factor income is also sometimes expressed as:
:''Total factor income = Employee compensation + Corporate profits + Proprietor's income + Rental income + Net interest''<ref>United States Bureau of Economic Analysis, {{PDFlink|[http://www.bea.gov/national/pdf/nipaguid.pdf ''A guide to the National Income and Product Accounts of the United States'']}}, page 5; retrieved November 2009. Another term, "business current transfer payments," may be added. Also, the document indicates that Capital Consumption Adjustment (CCAdj) and Inventory Valuation Adjustment (IVA) are applied to the proprietor's income and corporate profits terms; and CCAdj is applied to rental income.
</ref>

Yet another formula for GDP by the income method is:{{Citation needed|date=March 2009}}

:<math>GDP = R + I + P + SA + W</math>

where R : rents<br /> I : interests<br /> P : profits<br /> SA : statistical adjustments (corporate income taxes, dividends, undistributed corporate profits)<br /> W : wages<br/>Note the mnemonic, "ripsaw".

===Expenditure approach===
" All expenditure incurred by individuals during 1 year . "

In economics, most things produced are produced for sale, and sold. Therefore, measuring the total expenditure of money used to buy things is a way of measuring production. This is known as the expenditure method of calculating GDP. Note that if you knit yourself a sweater, it is production but does not get counted as GDP because it is never sold. Sweater-knitting is a small part of the economy, but if one counts some major activities such as child-rearing (generally unpaid) as production, GDP ceases to be an accurate indicator of production. Similarly, if there is a long term shift from non-market provision of services (for example cooking, cleaning, child rearing, do-it yourself repairs) to market provision of services, then this trend toward increased
market provision of services may mask a dramatic decrease in actual domestic production, resulting in overly optimistic
and inflated reported GDP. This is particularly a problem for economies which have shifted from production economies to
[[service economy|service economies]].

====Components of GDP by expenditure====
[[File:GDP Categories - United States.png|thumb|right|350px|Components of U.S. GDP]]

'''GDP (Y)''' is a sum of '''Consumption (C)''', '''Investment (I)''', '''Government Spending (G)''' and '''Net Exports (X – M)'''.
:'''Y''' = '''C''' + '''I''' + '''G''' + '''(X − M)'''

Here is a description of each GDP component:
* '''C (consumption)''' is normally the largest GDP component in the economy, consisting of private ([[household final consumption expenditure]]) in the economy. These personal expenditures fall under one of the following categories: [[durable goods]], non-durable goods, and services. Examples include food, rent, jewelry, gasoline, and medical expenses but does not include the purchase of new housing.
* '''I (investment)''' includes, for instance, business investment in equipment, but does not include exchanges of existing assets. Examples include construction of a new [[mining|mine]], purchase of software, or purchase of machinery and equipment for a factory. Spending by households (not government) on new houses is also included in Investment. In contrast to its colloquial meaning, 'Investment' in GDP does not mean purchases of [[financial market|financial products]]. Buying financial products is classed as '[[saving]]', as opposed to '''investment'''. This avoids double-counting: if one buys shares in a company, and the company uses the money received to buy plant, equipment, etc., the amount will be counted toward GDP when the company spends the money on those things; to also count it when one gives it to the company would be to count two times an amount that only corresponds to one group of products. Buying [[Bond (finance)|bonds]] or [[stock]]s is a swapping of [[deed]]s, a transfer of claims on future production, not directly an expenditure on products.
* '''G (government spending)''' is the sum of [[government spending|government expenditures]] on [[final goods]] and services. It includes salaries of [[public servants]], purchase of weapons for the military, and any investment expenditure by a government. It does not include any [[transfer payment]]s, such as [[social security]] or [[unemployment benefits]].
* '''X (exports)''' represents gross exports. GDP captures the amount a country produces, including goods and services produced for other nations' consumption, therefore exports are added.
* '''M (imports)''' represents gross imports. Imports are subtracted since imported goods will be included in the terms '''G''', '''I''', or '''C''', and must be deducted to avoid counting foreign [[Supply and demand|supply]] as domestic.

A fully equivalent definition is that '''GDP (Y)''' is the sum of '''[[final consumption expenditure]] (FCE)''', '''[[gross fixed capital formation|gross capital formation]] (GCF)''', and '''net exports (X – M)'''.
:'''Y''' = '''FCE''' + '''GCF'''+ '''(X − M)'''
FCE can then be further broken down by three sectors (households, governments and non-profit institutions serving households) and GCF by five sectors (non-financial corporations, financial corporations, households, governments and [http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Glossary:Non-profit_institutions_serving_households_(NPISH) non-profit institutions serving households]). The advantage of this second definition is that expenditure is systematically broken down, firstly, by type of final use (final consumption or capital formation) and, secondly, by sectors making the expenditure, whereas the first definition partly follows a mixed delimitation concept by type of final use and sector.

Note that '''C''', '''G''', and '''I''' are expenditures on [[final goods]] and services; expenditures on intermediate goods and services do not count. (Intermediate goods and services are those used by businesses to produce other goods and services within the accounting year.<ref>Thayer Watkins, San José State University Department of Economics, [http://www.sjsu.edu/faculty/watkins/gdp.htm "Gross Domestic Product from the Transactions Table for an Economy"], commentary to first table, " Transactions Table for an Economy". (Page retrieved November 2009.)</ref>
)

According to the U.S. Bureau of Economic Analysis, which is responsible for calculating the national accounts in the United States, "In general, the source data for the expenditures components are considered more reliable than those for the income components [see income method, below]."<ref>''Concepts and Methods of the United States National Income and Product Accounts'', chap. 2.</ref>

====Examples of GDP component variables====
'''C''', '''I''', '''G''', and '''NX'''(net exports): If a person spends money to renovate a hotel to increase occupancy rates, the spending represents private investment, but if he buys shares in a consortium to execute the renovation, it is [[saving]]. The former is included when [[measuring GDP]] (in '''I'''), the latter is not. However, when the consortium conducted its own expenditure on renovation, that expenditure would be included in GDP.

If a hotel is a private home, spending for renovation would be measured as '''c'''onsumption, but if a government agency converts the hotel into an office for civil servants, the spending would be included in the public sector spending, or '''G'''.

If the renovation involves the purchase of a [[chandelier]] from abroad, that spending would be
counted as '''C''', '''G''', or '''I''' (depending on whether a private individual, the government, or a business is doing the renovation), but then counted again as an import and subtracted from the GDP so that GDP counts only goods produced within the country.

If a domestic producer is paid to make the chandelier for a foreign hotel, the payment would not be counted as '''C''', '''G''', or '''I''', but would be counted as an export.

[[Image:Gdp real growth rate 2007 CIA Factbook.PNG|thumb|right|200px|[[List of countries by GDP (real) growth rate|GDP real growth rates]] for 2010]]

A "production boundary" that delimits what will be counted as GDP.

<blockquote style="font-size:94%">
"One of the fundamental questions that must be addressed in preparing the national economic accounts is how to define the production boundary–that is, what parts of the myriad human activities are to be included in or excluded from the measure of the economic production."<ref>BEA, ''Concepts and Methods of the United States National Income and Product Accounts'', p 12.</ref>
</BLOCKQUOTE>
All output for market is at least in theory included within the boundary. Market output is defined as that which is sold for "economically significant" prices; economically significant
prices are "prices which have a significant influence on the amounts producers are willing to supply and purchasers wish to buy."<ref>''Australian National Accounts: Concepts, Sources and Methods'', 2000, sections 3.5 and 4.15.
</ref>
An exception is that illegal goods and services are often excluded even if they are sold at economically significant prices (Australia and the United States exclude them).

This leaves non-market output. It is partly excluded and partly included. First, "natural processes without human involvement or direction" are excluded.<ref>This and the following statement on entitlement to compensation are from ''Australian National Accounts: Concepts, Sources and Methods'', 2000, section 4.6.</ref>
Also, there must be a person or institution that owns or is entitled to compensation for the product. An example of what is included and excluded by these criteria is given by the United States' national accounts agency: "the growth of trees in an uncultivated forest is not included in production, but the harvesting of the trees from that forest is included."<ref>''Concepts and Methods of the United States National Income and Product Accounts'', page 2-2.
</ref>

Within the limits so far described, the boundary is further constricted by "functional considerations."<ref>''Concepts and Methods of the United States National Income and Product Accounts, page 2-2.
</ref>
The Australian Bureau for Statistics explains this:
"The national accounts are primarily constructed to assist governments and others to make market-based macroeconomic policy decisions, including analysis of markets and factors affecting market performance, such as inflation and unemployment."
Consequently, production that is, according to them, "relatively independent and isolated from markets," or "difficult to value in an economically meaningful way" [i.e., difficult to put a price on] is excluded.<ref>''Australian National Accounts: Concepts, Sources and Methods'', 2000, section 4.4.</ref>
Thus excluded are services provided by people to members of their own families free of charge, such as child rearing, meal preparation, cleaning, transportation, entertainment of family members, emotional support, care of the elderly.<ref>''Concepts and Methods of the United States National Income and Product Accounts'', page 2-2; and ''Australian National Accounts: Concepts, Sources and Methods'', 2000, section 4.4.
</ref>
Most other production for own (or one's family's) use is also excluded, with two notable exceptions which are given in the list later in this section.

Nonmarket outputs that ''are'' included within the boundary are listed below. Since, by definition, they do not have a market price, the compilers of GDP must ''impute'' a value to them, usually either the cost of the goods and services used to produce them, or the value of a similar item that is sold on the market.
* Goods and services provided by governments and non-profit organizations free of charge or for economically insignificant prices are included. The value of these goods and services is estimated as equal to their cost of production. This ignores the consumer surplus generated by an efficient and effective government supplied infrastructure. For example, government-provided clean water confers substantial benefits above its cost. Ironically, lack of such infrastructure which would result in higher water prices (and probably higher hospital and medication expenditures) would be reflected as a higher GDP. This may also cause a bias that mistakenly favors inefficient privatizations since some of the consumer surplus from privatized entities' sale of goods and services are indeed reflected in GDP.<ref name="Product Accounts page 2-4">''Concepts and Methods of the United States National Income and Product Accounts'', page 2-4.</ref>
* Goods and services produced for own-use by businesses are attempted to be included. An example of this kind of production would be a machine constructed by an engineering firm for use in its own plant.
* Renovations and upkeep by an individual to a home that she owns and occupies are included. The value of the upkeep is estimated as the rent that she could charge for the home if she did not occupy it herself. This is the largest item of production for own use by an individual (as opposed to a business) that the compilers include in GDP.<ref name="Product Accounts page 2-4"/> If the measure uses historical or book prices for real estate, this will grossly underestimate the value of the rent in real estate markets which have experienced significant price increases (or economies with general inflation). Furthermore, depreciation schedules for houses often accelerate the accounted depreciation relative to actual depreciation (a well built house can be lived in for several hundred years – a very long time after it has been fully depreciated). In summary, this is likely to grossly underestimate the value of existing housing stock on consumers' actual consumption or income.
* Agricultural production for consumption by oneself or one's household is included.
* Services (such as chequeing-account maintenance and services to borrowers) provided by banks and other financial institutions without charge or for a fee that does not reflect their full value have a value imputed to them by the compilers and are included. The financial institutions provide these services by giving the customer a less advantageous interest rate than they would if the services were absent; the value imputed to these services by the compilers is the difference between the interest rate of the account with the services and the interest rate of a similar account that does not have the services. According to the United States Bureau for Economic Analysis, this is one of the largest imputed items in the GDP.<ref>''Concepts and Methods of the United States National Income and Product Accounts'', page 2-5.</ref>

==GDP vs GNP==
GDP can be contrasted with [[gross national product]] (GNP) or [[Gross National Income|gross national income]] (GNI). The difference is that GDP defines its scope according to location, while GNP defines its scope according to ownership. In a global context, [[Gross world product|world GDP and world GNP]] are, therefore, equivalent terms.

GDP is product produced within a country's borders; GNP is product produced by enterprises owned by a country's citizens. The two would be the same if all of the productive enterprises in a country were owned by its own citizens, and those citizens did not own productive enterprises in any other countries. In practice, however, foreign ownership makes GDP and GNP non-identical. Production within a country's borders, but by an enterprise owned by somebody outside the country, counts as part of its GDP but not its GNP; on the other hand, production by an enterprise located outside the country, but owned by one of its citizens, counts as part of its GNP but not its GDP.

To take the United States as an example, the U.S.'s GNP is the value of output produced by American-owned firms, regardless of where the firms are located. Similarly, if a country becomes increasingly in debt, and spends large amounts of income servicing this debt this will be reflected in a decreased GNI but not a decreased GDP. Similarly, if a country sells off its resources to entities outside their country this will also be reflected over time in decreased GNI, but not decreased GDP. This would make the
use of GDP more attractive for politicians in countries with increasing national debt and decreasing assets.

Gross national income (GNI) equals GDP plus income receipts from the rest of the world minus income payments to the rest of the world.<ref>{{cite book |first=François |last=Lequiller |coauthor=Derek Blades |title=Understanding National Accounts |url=http://books.google.com/?id=pXpJL6f8b3wC&printsec=frontcover&dq=%22Understanding+National+Accounts%22#v=onepage&q=%22To%20convert%20GDP%20into%20GNI%22&f=false |publisher=OECD |year=2006 |page=18|isbn=978-92-64-02566-0 |quote=To convert GDP into GNI, it is necessary to add the income received by resident units from abroad and deduct the income created by production in the country but transferred to units residing abroad.}}</ref>

In 1991, the United States switched from using GNP to using GDP as its primary measure of production.<ref>United States, Bureau of Economic Analysis, Glossary, [http://www.bea.gov/glossary/glossary.cfm "GDP"]. Retrieved November 2009.</ref>
The relationship between United States GDP and GNP is shown in table 1.7.5 of the ''[[National Income and Product Accounts]]''.<ref>{{cite web|url=http://bea.gov/national/nipaweb/SelectTable.asp?Selected=Y |title=U.S. Department of Commerce. Bureau of Economic Analysis |publisher=Bea.gov |date=2009-10-21 |accessdate=2010-07-31}}</ref>

===International standards===
The international standard for measuring GDP is contained in the book ''[[United Nations System of National Accounts (UNSNA)|System of National Accounts]]'' (1993), which was prepared by representatives of the [[International Monetary Fund]], [[European Union]], [[Organization for Economic Co-operation and Development]], [[United Nations]] and [[World Bank]]. The publication is normally referred to as SNA93 to distinguish it from the previous edition published in 1968 (called SNA68) <ref name="Central Bureau of Statistics">{{cite web|title=National Accounts|url=http://www.central-bureau-of-statistics.an/SNA/sna_intro.asp|publisher=Central Bureau of Statistics|accessdate=2011-06-29}}</ref>

SNA93 provides a set of rules and procedures for the measurement of national accounts. The standards are designed to be flexible, to allow for differences in local statistical needs and conditions.

{{Expand section|date=August 2009}}

===National measurement===
Within each country GDP is normally measured by a national government statistical agency, as private sector organizations normally do not have access to the information required (especially information on expenditure and production by governments).
{{Main|National agencies responsible for GDP measurement}}

===Interest rates===
Net interest expense is a [[transfer payment]] in all sectors except the financial sector. Net interest expenses in the financial sector are seen as [[Mass production|production]] and [[value added]] and are added to GDP.

==Nominal GDP and adjustments to GDP==
The raw GDP figure as given by the equations above is called the nominal, historical, or current, GDP. When one compares GDP figures from one year to another, it is desirable to compensate for changes in the value of money – i.e., for the effects of inflation or deflation. To make it more meaningful for year-to-year comparisons, it may be multiplied by the ratio between the value of money in the year the GDP was measured and the value of money in a base year. For example, suppose a country's GDP in 1990 was $100 million and its GDP in 2000 was $300 million. Suppose also that inflation had halved the value of its currency over that period. To meaningfully compare its GDP in 2000 to its GDP in 1990, we could multiply the GDP in 2000 by one-half, to make it relative to 1990 as a base year. The result would be that the GDP in 2000 equals $300 million × one-half = $150 million, ''in 1990 monetary terms.'' We would see that the country's GDP had realistically increased 50 [[Percentage#Percentage_increase_and_decrease|percent]] over that period, not 200 percent, as it might appear from the raw GDP data. The GDP adjusted for changes in money value in this way is called the '''real, or constant, GDP'''.

The factor used to convert GDP from current to constant values in this way is called the ''[[GDP deflator]]''. Unlike [[consumer price index]], which measures inflation or deflation in the price of household consumer goods, the GDP deflator measures changes in the prices of all domestically produced goods and services in an economy including investment goods and government services, as well as household consumption goods.<ref>HM Treasury, ''Background information on GDP and GDP deflator''<br/>
Some of the complications involved in comparing national accounts from different years are explained in this World Bank [http://web.worldbank.org/WBSITE/EXTERNAL/DATASTATISTICS/EXTDECSTAMAN/0,,contentMDK:20908551~menuPK:2648276~pagePK:64168445~piPK:64168309~theSitePK:2077967~isCURL:Y,00.html document].
</ref>

Constant-GDP figures allow us to calculate a GDP growth rate, which indicates how much a country's production has increased (or decreased, if the growth rate is negative) compared to the previous year.
:Real GDP growth rate for year ''n'' = [(Real GDP in year ''n'') − (Real GDP in year ''n'' − 1)] / (Real GDP in year ''n'' − 1)

Another thing that it may be desirable to account for is population growth. If a country's GDP doubled over a certain period, but its population tripled, the increase in GDP may not mean that the standard of living increased for the country's residents; the average person in the country is producing less than they were before. ''Per-capita GDP'' is a measure to account for population growth.

==Cross-border comparison and PPP==
The level of GDP in different countries may be compared by converting their value in national currency according to ''either'' the current currency exchange rate, or the purchase power parity exchange rate.
* '''Current currency exchange rate''' is the exchange rate in the international [[currency market]].
* '''Purchasing power parity exchange rate''' is the exchange rate based on the [[purchasing power parity]] (PPP) of a currency relative to a selected standard (usually the [[United States dollar]]). This is a comparative (and theoretical) exchange rate, the only way to directly realize this rate is to sell an entire [[CPI]] basket in one country, convert the cash at the currency market rate & then rebuy that same basket of goods in the other country (with the converted cash). Going from country to country, the distribution of prices within the basket will vary; typically, non-tradable purchases will consume a greater proportion of the basket's total cost in the higher GDP country, per the [[Balassa-Samuelson effect]].

The ranking of countries may differ significantly based on which method is used.
* The ''current exchange rate method'' converts the value of goods and services using global currency [[exchange rates]]. The method can offer better indications of a country's international purchasing power and relative economic strength. For instance, if 10% of GDP is being spent on buying hi-tech foreign [[weapon|arms]], the number of weapons purchased is entirely governed by ''current exchange rates'', since arms are a traded product bought on the international market. There is no meaningful 'local' price distinct from the international price for high technology goods.
* The ''purchasing power parity method'' accounts for the relative effective domestic purchasing power of the average producer or consumer within an economy. The method can provide a better indicator of the living standards of less developed countries, because it compensates for the weakness of local currencies in the international markets. For example, India ranks 10th by nominal GDP, but 3rd by PPP. The PPP method of GDP conversion is more relevant to non-traded goods and services.

There is a clear pattern of the ''purchasing power parity method'' decreasing the disparity in GDP between high and low income (GDP) countries, as compared to the ''current exchange rate method''. This finding is called the [[Penn effect]].

For more information, see [[Measures of national income and output]].

==Per unit GDP==
GDP is an aggregate figure which does not consider differing sizes of nations. Therefore, GDP can be stated as ''[[List of countries by GDP (PPP) per capita|GDP per capita]]'' (per person) in which total GDP is divided by the resident population on a given date, ''GDP per citizen'' where total GDP is divided by the numbers of citizens residing in the country on a given date, and less commonly GDP per unit of a resource input, such as ''GDP per GJ of energy'' or [[Gross domestic product per barrel]].
''GDP per citizen'' in the above case is pretty similar to ''GDP per capita'' in most nations, however, in nations with very high proportions of temporary foreign workers like in Persian Gulf nations, the two figures can be vastly different.

==Standard of living and GDP==
GDP per capita is not a measurement of the [[standard of living]] in an [[economic system|economy]]; however, it is often used as such an indicator, on the rationale that all citizens would benefit from their country's increased economic production. Similarly, GDP per capita is not a measure of personal income. GDP may increase while [[real income]]s for the majority decline. The major advantage of GDP per capita as an indicator of standard of living is that it is measured frequently, widely, and consistently. It is measured frequently in that most countries provide information on GDP on a quarterly basis, allowing trends to be seen quickly. It is measured widely in that some measure of GDP is available for almost every country in the world, allowing inter-country comparisons. It is measured consistently in that the technical definition of GDP is relatively consistent among countries.

The major disadvantage is that it is not a measure of standard of living. GDP is intended to be a measure of total national economic activity—a separate concept.

The argument for using GDP as a standard-of-living [[proxy (statistics)|proxy]] is not that it is a good indicator of the absolute level of standard of living, but that living standards tend to move with per-capita GDP, so that ''changes'' in living standards are readily detected through changes in GDP.

==Externalities==
GDP is widely used by economists to gauge economic recession and recovery and an economy's general monetary ability to address externalites. It is not meant to measure externalities. It serves as a general metric for a nominal monetary [[standard of living]] and is not adjusted for costs of living within a region. GDP is a neutral measure which merely shows an economy's general ability to pay for externalities such as social and environmental concerns.<ref>{{cite news|url=http://www.nytimes.com/2009/08/10/opinion/10zencey.html?_r=4&pagewanted=1&emc=eta1 |title=Eric Zencey-G.D.P. R.I.P. |publisher=Nytimes.com |date=August 2009|accessdate=2011-01-31}}</ref> Examples of externalities include:

* '''Wealth distribution''' – GDP does not account for variances in incomes of various demographic groups. See [[income inequality metrics]] for discussion of a variety of inequality-based economic measures.
* '''Non-market transactions'''–GDP excludes activities that are not provided through the market, such as household production and volunteer or unpaid services. As a result, GDP is understated. Unpaid work conducted on [[FOSS|Free and Open Source Software]] (such as [[GNU/Linux]]) contribute nothing to GDP, but it was [[Linux#Development|estimated]] that it would have cost more than a billion US dollars for a commercial company to develop. Also, if Free and Open Source Software became identical to its [[proprietary software]] counterparts, and the nation producing the propriety software stops buying proprietary software and switches to Free and Open Source Software, then the GDP of this nation would reduce; however, there would be no reduction in economic production or standard of living. The work of New Zealand economist [[Marilyn Waring]] has highlighted that if a concerted attempt to factor in unpaid work were made, then it would in part undo the injustices of unpaid (and in some cases, slave) labour, and also provide the political transparency and accountability necessary for democracy. Shedding some doubt on this claim, however, is the theory that won economist [[Douglass North]] the Nobel Memorial Prize in Economic Sciences in 1993.{{Citation needed|date=July 2011}} North argued that the encouragement of private invention and enterprise due to the creation and strengthening of the patent system became the fundamental catalyst behind the Industrial Revolution in England.
* '''Underground economy'''–Official GDP estimates may not take into account the [[underground economy]], in which transactions contributing to production, such as illegal trade and tax-avoiding activities, are unreported, causing GDP to be underestimated.
* '''Asset Value'''–GDP does not take into account the value of all assets in an economy. This is akin to ignoring a company's [[balance sheet]], and judging it solely on the basis of its [[income statement]].
* '''Non-monetary economy'''–GDP omits economies where no money comes into play at all, resulting in inaccurate or abnormally low GDP figures. For example, in countries with major business transactions occurring informally, portions of local economy are not easily registered. [[barter (economics)|Bartering]] may be more prominent than the use of money, even extending to services (I helped you build your house ten years ago, so now you help me).
* GDP also ignores [[subsistence production]].
* '''Quality improvements and inclusion of new products'''–By not adjusting for quality improvements and new products, GDP understates true [[economic growth]]. For instance, although computers today are less expensive and more powerful than computers from the past, GDP treats them as the same products by only accounting for the monetary value. The introduction of new products is also difficult to measure accurately and is not reflected in GDP despite the fact that it may increase the standard of living. For example, even the richest person from 1900 could not purchase standard products, such as antibiotics and cell phones, that an average consumer can buy today, since such modern conveniences did not exist back then.
* '''What is being produced'''–GDP counts work that produces no net change or that results from repairing harm. For example, rebuilding after a natural disaster or war may produce a considerable amount of economic activity and thus boost GDP. The economic value of [[health care]] is another classic example—it may raise GDP if many people are sick and they are receiving expensive treatment, but it is not a desirable situation. Alternative economic estimates, such as the [[standard of living]] or [[discretionary income]] per capita try to measure the human [[utility]] of economic activity. See [[uneconomic growth]].
* '''Sustainability of growth'''– GDP is a measurement of economic historic activity and is not necessarily a projection. A country may achieve a temporarily high GDP from use of natural resources or by misallocating investment.
* Nominal GDP doesn't measure variations in purchasing power or costs of living by area, so when the GDP figure is deflated over time, GDP growth can vary greatly depending on the basket of goods used and the relative proportions used to deflate the GDP figure.
* Cross-border comparisons of GDP can be inaccurate as they do not take into account local differences in the quality of goods, even when adjusted for [[purchasing power parity]]. This type of adjustment to an exchange rate is controversial because of the difficulties of finding comparable baskets of goods to compare purchasing power across countries. For instance, people in country A may consume the same number of locally produced apples as in country B, but apples in country A are of a more tasty variety. This difference in material well being will not show up in GDP statistics. This is especially true for goods that are not traded globally, such as housing

==Limitations and Criticisms==
{{expand section|date=February 2012}}

[[Simon Kuznets]], the economist who developed the first comprehensive set of measures of national income, stated in his first report to the US Congress in 1934, in a section titled "Uses and Abuses of National Income Measurements":<ref name="kuznets" /><blockquote> The valuable capacity of the human mind to simplify a complex situation in a compact characterization becomes dangerous when not controlled in terms of definitely stated criteria. With quantitative measurements especially, the definiteness of the result suggests, often misleadingly, a precision and simplicity in the outlines of the object measured. Measurements of national income are subject to this type of illusion and resulting abuse, especially since they deal with matters that are the center of conflict of opposing social groups where the effectiveness of an argument is often contingent upon oversimplification. [...]</blockquote>

<blockquote>All these qualifications upon estimates of national income as an index of productivity are just as important when income measurements are interpreted from the point of view of economic welfare. But in the latter case additional difficulties will be suggested to anyone who wants to penetrate below the surface of total figures and market values. Economic welfare cannot be adequately measured unless the personal distribution of income is known. And no income measurement undertakes to estimate the reverse side of income, that is, the intensity and unpleasantness of effort going into the earning of income. The welfare of a nation can, therefore, scarcely be inferred from a measurement of national income as defined above.</blockquote> In 1962, Kuznets stated:<ref>Simon Kuznets. "How To Judge Quality". The New Republic, October 20, 1962</ref><blockquote>Distinctions must be kept in mind between quantity and quality of growth, between costs and returns, and between the short and long run. Goals for more growth should specify more growth of what and for what.</blockquote>

[[Austrian School]] economist [[Frank Shostak]] has argued that GDP is an empty abstraction devoid of any link to the real world, and, therefore, has little or no value in economic analysis. Says Shostak:<ref>{{cite web | title=What is up with the GDP? | author=Frank Shostak | url=http://mises.org/daily/770}}</ref>

<blockquote>The GDP framework cannot tell us whether final goods and services that were produced during a particular period of time are a reflection of real wealth expansion, or a reflection of capital consumption. For instance, if a government embarks on the building of a pyramid, which adds absolutely nothing to the well-being of individuals, the GDP framework will regard this as economic growth. In reality, however, the building of the pyramid will divert real funding from wealth-generating activities, thereby stifling the production of wealth.
</blockquote>

<blockquote>
So what are we to make out of the periodical pronouncements that the economy, as depicted by real GDP, grew by a particular percentage? All we can say is that this percentage has nothing to do with real economic growth and that it most likely mirrors the pace of monetary pumping. We can thus conclude that the GDP framework is an empty abstraction devoid of any link to the real world.
</blockquote>

Many [[environmentalism|environmentalists]] argue that GDP is a poor measure of social progress because it does not take into account harm to the [[biosphere|environment]].<ref>''The Virtues of Ignoring GDP'' http://www.thebrokeronline.eu/Articles/The-virtues-of-ignoring-GDP</ref><ref>''The Rise and Fall of G.D.P.'' http://www.nytimes.com/2010/05/16/magazine/16GDP-t.html?pagewanted=all</ref>

==Lists of countries by their GDP==
* [[Lists of countries by GDP]]
* [[List of countries by GDP (nominal)]], ([[List of countries by GDP (nominal) per capita|per capita]])
* [[List of continents by GDP (nominal)]]
* [[List of countries by GDP (PPP)]], ([[List of countries by GDP (PPP) per capita|per capita]]), ([[List of countries by GDP (PPP) per hour worked|per hour]])
* [[List of countries by GDP growth]]
* [[List of countries by GDP (real) growth rate]], ([[List of countries by GDP (real) growth rate per capita|per capita]])
* [[List of countries by GDP sector composition]]
* [[List of countries by future GDP estimates (PPP)]], ([[List of countries by future GDP per capita estimates (PPP)|per capita]]), ([[List of countries by future GDP (nominal) estimates|nominal]])

==List of newer approaches to the measurement of (economic) progress==
* [[Human development index]] (HDI) – up until 2009 report HDI used GDP as a part of its calculation and then factors in indicators of life expectancy and education levels. In 2010 the GDP component has been replaced with [[Gross national income|GNI]].
* [[Genuine progress indicator]] (GPI) or [[Index of Sustainable Economic Welfare]] (ISEW) – The GPI and the ISEW attempt to address many of the above criticisms by taking the same raw information supplied for GDP and then adjust for income distribution, add for the value of household and volunteer work, and subtract for crime and pollution.
* [[Gross national happiness]] (GNH) – GNH measures quality of life or social progress in more holistic and psychological terms than GDP.
* European Quality of Life Survey – The survey, first published in 2005, assessed quality of life across European countries through a series of questions on overall [[subjective life satisfaction]], satisfaction with different aspects of life, and sets of questions used to calculate deficits of time, loving, being and having.<ref>{{cite web |url=http://www.eurofound.europa.eu/publications/htmlfiles/ef0591.htm |title=First European Quality of Life Survey}}</ref>
* [[Gross national happiness]] – The Centre for Bhutanese Studies in [[Bhutan]] is working on a complex set of subjective and objective indicators to measure 'national happiness' in various domains (living standards, health, education, eco-system diversity and resilience, cultural vitality and diversity, time use and balance, good governance, community vitality and psychological well-being). This set of indicators would be used to assess progress towards gross national happiness, which they have already identified as being the nation's priority, above GDP.
* [[Happy Planet Index]] – The happy planet index (HPI) is an index of human well-being and environmental impact, introduced by the [[New Economics Foundation]] (NEF) in 2006. It measures the environmental efficiency with which human well-being is achieved within a given country or group. Human well-being is defined in terms of [[subjective life satisfaction]] and [[life expectancy]] while environmental impact is defined by the [[Ecological Footprint]].
* [[OECD Better Life Index]] - The better lives compendium of indicators produced in 2011 reflects some 10 years by the organisation to develop a wider of set of indicators more closely attuned to the measurement of wellbeing or welfare outcomes. There is felt to be considerable convergence (in 2011) in high income countries about the kinds of dimensions that should be included in such multi-dimensional approaches to welfare measurement - see for instance the capabilities measurement research project [[capabilities approach]].
* [[Composite Wealth Indicators]] – Namely yearly material wealth (an amended version of GNI to include depletion of natural resources and the costs of pollution), biological wealth (measured through life expectancy) and thus expected material wealth (or physical wealth), a linear combination of biological and yearly material wealth (the amount of material wealth expected to be produced by an individual during his/her lifetime).<ref>See Emanuele Felice, Neither dashboard nor 'mashup' indices: an empirical wealth approach as a pathway to a comprehensive measure of development, http://www.h-economica.uab.es/wps/2012_01.pdf</ref>
* [[Future Orientation Index]] - [[Tobias Preis]] et al. used [[Google Trends]] data to demonstrate that Internet users from countries with a higher per capita gross domestic product (GDP) are more likely to search for information about the future than information about the past. The findings, published in the journal [[Scientific Reports]], suggest there may be a link between online behaviour and real-world economic indicators.<ref>{{cite journal |author=Tobias Preis, Helen Susannah Moat, H. Eugene Stanley and Steven R. Bishop |title=Quantifying the Advantage of Looking Forward |journal=Scientific Reports |volume= 2 |pages=350 |year=2012 |doi=10.1038/srep00350 |pmid=22482034 |pmc=3320057}}</ref><ref>{{cite web | url=http://www.newscientist.com/article/dn21678-online-searches-for-future-linked-to-economic-success.html | title=Online searches for future linked to economic success | author=Paul Marks |work=New Scientist | date=April 5, 2012 | accessdate=April 9, 2012}}</ref><ref>{{cite web | url=http://arstechnica.com/gadgets/news/2012/04/google-trends-reveals-clues-about-the-mentality-of-richer-nations.ars | title=Google Trends reveals clues about the mentality of richer nations | author=Casey Johnston |work=Ars Technica | date=April 6, 2012 | accessdate=April 9, 2012}}</ref> The authors of the study examined Google search queries made by Internet users in 45 different countries in 2010 and calculated the ratio of the volume of searches for the coming year (‘2011’) to the volume of searches for the previous year (‘2009’), which they call the ‘future orientation index’.<ref>{{cite web | url = http://www.tobiaspreis.de/bigdata/future_orientation_index.pdf | title = Supplementary Information: The Future Orientation Index is available for download | author = Tobias Preis | date = 2012-05-24 | accessdate = 2012-05-24}}</ref> They compared the future orientation index to the per capita GDP of each country and found a strong tendency for countries in which Google users enquire more about the future to exhibit a higher GDP. The results hint that there may potentially be a relationship between the economic success of a country and the information-seeking behaviour of its citizens online.
* [[World Governance Index]] - Basing their work on the [[United Nations Millennium Declaration]], which was the subject of unprecedented U.N. consensus among the heads of state and government who adopted it in 2000, a team of researchers of the [http://www.world-governance.net Forum for a new World Governance (FnWG)] focused its research on the five main concepts defining the application framework of world governance and constituting key goals to be reached by 2015: [[Peace]] and [[Security]]; [[Democracy]] and [[Rule of Law]]; [[Human Rights]] and [[Participation (decision making)|Participation]]; [[Sustainable Development]] and [[Human development (humanity)|Human Development]]

==See also==
{{col-begin}}
{{col-3}}
* [[Annual average GDP growth]]
* [[Chained volume series]]
* [[Circular flow of income]]
* [[Gross output]]
* [[Gross regional domestic product]]
* [[Gross state product]]
{{col-3}}
* [[Gross value added]]
* [[Gross world product]]
* [[Intermediate consumption]]
* [[Inventory investment]]
* [[List of countries by average wage]]
* [[List of countries by household income]]
{{col-3}}
* [[List of economic reports by U.S. government agencies]]
* [[Misery index (economics)]]
* [[National average salary]]
* [[Production (economics)]]
* [[Potential output]]
* [[Real gross domestic product]]
{{col-end}}

==Bibliography==
*Australian Bureau for Statistics, [http://www.abs.gov.au/Ausstats/abs@.nsf/Latestproducts/3F880EE1D366198CCA2569A400061616?opendocument ''Australian National Accounts: Concepts, Sources and Methods''], 2000. Retrieved November 2009. In depth explanations of how GDP and other national accounts items are determined.

*United States Department of Commerce, Bureau of Economic Analysis, {{PDFlink|[http://www.bea.gov/national/pdf/NIPAhandbookch1-4.pdf ''Concepts and Methods of the United States National Income and Product Accounts'']}}. Retrieved November 2009. In depth explanations of how GDP and other national accounts items are determined.

==References==
{{Reflist|colwidth=30em}}

==External links==
{{commons category|Gross domestic product}}

===Global===
* [http://www.google.com/publicdata/explore?ds=wb-wdi&met=ny_gdp_mktp_cd&idim=country:USA:CHN:FRA:DEU:JPN:GBR World GDP Chart (since 1960)]
* [http://www.abs.gov.au/Ausstats/abs@.nsf/66f306f503e529a5ca25697e0017661f/3f880ee1d366198cca2569a400061616!OpenDocument Australian Bureau of Statistics Manual on GDP measurement]
* [http://perso.wanadoo.fr/pgreenfinch/eoblpib.htm GDP-indexed bonds]
* [http://sun-bin.blogspot.com/2005/12/map-world-population-and-gdp-scaled.html GDP scaled maps]
* [http://www.intelligentguess.com/blog/?p=119 Euro area GDP growth rate (since 1996) as compared to the Bank Rate (since 2000)]
* [http://ddp-ext.worldbank.org/ext/DDPQQ/member.do?method=getMembers&userid=1&queryId=135 World Development Indicators (WDI)]
* [http://www.economist.com/countries/ Economist Country Briefings]
* [http://unstats.un.org/unsd/databases.htm UN Statistical Databases]
* [http://wikiprogress.org/enwiki/w/index.php/Is_Life_Getting_Better Is Life Getting Better : What is GDP?] Pamphlet describing the basic idea of GDP, from OECD's Measuring Progress project.

===Data===
* [http://www.visionofhumanity.org/gpi-data/#/2010/GDP1 Thermal Maps of the World Nominal GDP in US$ purchasing power parity from the EIU 2007–2010]
* [http://www.bea.gov/national/index.htm#gdp Bureau of Economic Analysis: Official United States GDP data]
* [http://www.historicalstatistics.org/ Historicalstatistics.org: Links to historical statistics on GDP for different countries and regions]
* [http://www.measuringworth.org/usgdp/ Historical US GDP (yearly data)], 1790–present
* [http://finance-data.com/series/GDP Historical US GDP (quarterly data)], 1947–present
* [http://dx.doi.org/10.1787/2074384x-table3 OECD Statistics]
* [http://www.google.com/publicdata/explore?ds=a7jenngfc4um7_&ctype=l&strail=false&nselm=h&met_y=gross_domestic_product&hl=en&dl=en Google – public data]: GDP and Personal Income of the U.S. (annual): Nominal Gross Domestic Product

===Articles and books===
* Stiglitz JE, Sen A, Fitoussi J-P. Mismeasuring our Lives: Why GDP Doesn't Add Up, New Press, New York, 2010.
* [http://dieoff.org/page11.htm What's wrong with the GDP?]
* [http://ingrimayne.saintjoe.edu/econ/Measuring/GNP2.html Limitations of GDP Statistics by Schenk, Robert.]
* [http://pages.stern.nyu.edu/~nroubini/MEASURE.HTM whether output and CPI inflation are mismeasured, by [[Nouriel Roubini]] and David Backus, in Lectures in Macroeconomics]
* [[Fengbo Zhang]] – the founder of [[China GDP]]
*Chapter 22 of Dr. Roger A. McCain's [http://william-king.www.drexel.edu/top/prin/txt/EcoToC.html Essential Principles of Economics: A Hypermedia Text]
* Rodney Edvinsson, {{PDFlink|1=[http://urn.kb.se/resolve?urn=urn:nbn:se:su:diva-378 Growth, Accumulation, Crisis: With New Macroeconomic Data for Sweden 1800–2000]}}
* Clifford Cobb, Ted Halstead and Jonathan Rowe. "If the GDP is up, why is America down?" The Atlantic Monthly, vol. 276, no. 4, October 1995, pages 59–78.
* Jerorn C.J.M. van den Bergh, "[http://papers.ssrn.com/sol3/papers.cfm?abstract_id=962343 Abolishing GDP]"
* [http://www.oecdobserver.org/news/fullstory.php/aid/1507/GDP_and_GNI.html GDP and GNI] in OECD Observer No246-247, Dec 2004-Jan 2005
* Stiglitz, JE, [http://www.oecdobserver.org/news/fullstory.php/aid/2793/Progress,_what_progress_.html Progress, what progress?] in OECD Observer No272 March 2009

{{GDP country lists}}
{{Global economic classifications}}

{{DEFAULTSORT:Gross Domestic Product}}
[[Category:Gross domestic product| ]]
[[Category:National accounts]]

{{Link GA|de}}

[[af:Bruto binnelandse produk]]
[[ar:ناتج محلي إجمالي]]
[[an:Producto Interior Bruto]]
[[az:Ümumi Daxili Məhsul]]
[[bm:Bakrunba Sokɔnɔ Karajago]]
[[bn:মোট দেশজ উৎপাদন]]
[[zh-min-nan:Kok-lāi chóng seng-sán]]
[[be:Валавы ўнутраны прадукт]]
[[be-x-old:Сукупны ўнутраны прадукт]]
[[bg:Брутен вътрешен продукт]]
[[bar:Bruttoinlandsprodukt]]
[[bs:Bruto domaći proizvod]]
[[br:Produadur diabarzh gros]]
[[ca:Producte interior brut]]
[[cs:Hrubý domácí produkt]]
[[cy:Cynnyrch mewnwladol crynswth]]
[[da:BNI per indbygger]]
[[de:Bruttoinlandsprodukt]]
[[et:Sisemajanduse kogutoodang]]
[[el:Ακαθάριστο Εγχώριο Προϊόν]]
[[es:Producto interno bruto]]
[[eo:Malneta enlanda produkto]]
[[eu:Barne produktu gordin]]
[[fa:تولید ناخالص داخلی]]
[[fr:Produit intérieur brut]]
[[ga:Olltáirgeacht intíre]]
[[gv:Lane troar sthie]]
[[gd:Làn-thoradh Dùthchail]]
[[gl:Produto Interior Bruto]]
[[got:𐌱𐍂𐌿𐍄𐍄𐍉𐌹𐌽𐌽𐌰𐌻𐌰𐌽𐌳𐌲𐌰𐍃𐌼𐌹𐌸𐍉𐌽𐍃]]
[[ko:국내 총생산]]
[[hy:Համախառն ներքին արդյունք]]
[[hi:सकल घरेलू उत्पाद]]
[[hr:Bruto domaći proizvod]]
[[io:Kuntara landala produkto]]
[[ilo:Dagup ti domestiko a produkto]]
[[id:Produk domestik bruto]]
[[is:Landsframleiðsla]]
[[it:Prodotto interno lordo]]
[[he:תוצר מקומי גולמי]]
[[jv:Prodhuk domèstik bruto]]
[[kn:ರಾಷ್ಟ್ರೀಯ ಉತ್ಪನ್ನ]]
[[krc:Бютеулюк ич продукт]]
[[ka:მთლიანი შიდა პროდუქტი]]
[[kk:Жалпы ішкі өнім]]
[[ky:ИДП]]
[[lo:ລວມຍອດຜະລິດຕະພັນພາຍໃນ]]
[[la:Productus domesticus grossus]]
[[lv:Iekšzemes kopprodukts]]
[[lt:Bendrasis vidaus produktas]]
[[hu:Bruttó hazai termék]]
[[mk:Бруто домашен производ]]
[[mr:वार्षिक सकल उत्पन्न]]
[[xmf:ედომუშამი დინოხოლენი პროდუქტი]]
[[arz:انتاج محلى اجمالى]]
[[ms:Keluaran dalam negara kasar]]
[[cdo:Guók-nô̤i sĕng-sāng cūng-dĭk]]
[[ml:മൊത്ത ആഭ്യന്തര ഉത്പാദനം]]
[[mn:Дотоодын нийт бүтээгдэхүүн]]
[[my:စုစုပေါင်း ပြည်တွင်းထုတ်လုပ်မှု]]
[[no:Bruttonasjonalprodukt]]
[[nl:Bruto binnenlands product]]
[[ja:国内総生産]]
[[oc:Produch interior brut]]
[[nds:Bruttobinnenlandprodukt]]
[[pl:Produkt krajowy brutto]]
[[pt:Produto interno bruto]]
[[ro:Produs intern brut]]
[[ru:Валовой внутренний продукт]]
[[sah:Брутто ис оҥоhук]]
[[sq:Bruto prodhimi vendor]]
[[scn:Prudottu Nternu Lordu]]
[[simple:Gross domestic product]]
[[sk:Hrubý domáci produkt]]
[[sl:Bruto domači proizvod]]
[[sr:Бруто домаћи производ]]
[[sh:Bruto domaći proizvod]]
[[su:Produk doméstik bruto]]
[[sv:Bruttonationalprodukt]]
[[fi:Bruttokansantuote]]
[[tl:Kabuuang domestikong produkto]]
[[ta:மொத்த உள்நாட்டு உற்பத்தி]]
[[te:స్థూల దేశీయోత్పత్తి]]
[[th:ผลิตภัณฑ์มวลรวมในประเทศ]]
[[tr:Gayrısafî yurtiçi hâsıla]]
[[udm:ВВП]]
[[uk:Валовий внутрішній продукт]]
[[ur:خام ملکی پیداوار]]
[[ug:مىللى دارامەت]]
[[vec:PIL]]
[[vi:Tổng sản phẩm nội địa]]
[[zh-classical:國內生產總值]]
[[yi:ברוטא אינלענדישער פראדוקט]]
[[yo:Gbogbo Ìpawó Orílẹ̀-èdè]]
[[zh:国内生产总值]]

Revision as of 00:26, 5 December 2012

This subject is about GDP.A region's gross domestic product, or GDP, is one of the ways for measuring the size of its economy. The GDP of a country is defined as the total market value of all final goods and services produced within a country in a given period of time (usually a calendar year). It is also considered the sum of value added at every stage of production (the intermediate stages) of all final goods and services produced within a country in a given period of time. Until the 1992 the term GNP or gross national product was used in the United States. The two terms GDP and GNP are almost identical - and yet entirely different; GDP (or GDI - Gross Domestic Income) being concerned with the region in which income is generated. That is, what is the market value of all the output produced in a nation, the United States, for example, in one year. GDP concerns itself with where the output is produced and not who produced it. Meanwhile, GNP (or GNI - Gross National Income) is a measure of the accrual of income or the value of the output, produced by the "nationals" of a region. GNP concerns itself with who "owns" the production. If we take the USA as an example again, GNP measures the value of output produced by American firms, regardless of where the firms are located. This compares to GDP which is concerned with where the production takes place and not if the company is an American firm or not. Supposing that a firm can be defined as American in an economic world where most large firms are actually global groups.

The most common approach to measuring and understanding GDP is the expenditure method:

GDP = consumption + investment + (government spending) + (exports − imports), or, GDP = C + I + G + (X-M) "Gross" means depreciation of capital stock is not included. With depreciation, with net investment instead of gross investment, it is the net domestic product. Consumption and investment in this equation are the expenditure on final goods and services. The exports minus imports part of the equation (often called cumulative exports) then adjusts this by subtracting the part of this expenditure not produced domestically (the imports), and adding back in domestic area (the exports).

Economists (since Keynes) have preferred to split the general consumption term into two parts; private consumption, and public sector (or government) spending. Two advantages of dividing total consumption this way in theoretical macroeconomics are:

Private consumption is a central concern of welfare economics. The private investment and trade portions of the economy are ultimately directed (in mainstream economic models) to increases in long-term private consumption. If separated from endogenous private consumption, government consumption can be treated as exogenous, so that different government spending levels can be considered within a miraculous piece of a frame

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