Definition Show
GDP stands for "Gross Domestic Product" and represents the total monetary value of all final goods and services produced (and sold on the market) within a country during a period of time (typically 1 year). Purpose GDP is the most commonly used measure of economic activity. History The first basic concept of GDP was invented at the end of the 18th century. The modern concept was developed by the American economist Simon Kuznets in 1934 and adopted as the main measure of a country's economy at the Bretton Woods conference in 1944. What does"Gross" stand for?"Gross" (in "Gross Domestic Product") indicates that products are counted regardless of their subsequent use. A product can be used for consumption, for investment, or to replace an asset. In all cases, the product's final "sales receipt" will be added to the total GDP figure. In contrast, "Net" doesn't account for products used to replace an asset (in order to offset depreciation). "Net" only shows products used for consumption or investment. What does"Domestic" stand for? (GDP vs. GNP and GNI)Domestic (GDP) National (GNP) GNI What does "Product" stand for?"Product" (in "Gross Domestic Product") stands for production, or economic output, of final goods and services sold on the market. Included in GDP:
Not included in GDP:
Nominal (Current) GDP vs Real (Constant) GDPNominal GDP (or "Current GDP") = face value of output, without any inflation adjustment Real GDP (or "Constant GDP") = value of output adjusted for inflation or deflation. It allows us to determine whether the value of output has changed because more is being produced or simply because prices have increased. Real GDP is used to calculate GDP growth. How to calculate GDPGDP can be calculated in three ways: using the production, expenditure, or income approach. All methods should give the same result.
GDP FormulaThe formula for calculating GDP with the expenditure approach is the following:
or, expressed in a formula:
GDP is usually calculated by the national statistical agency of the country following the international standard. In the United States, GDP is measured by the Bureau of Economic Analysis within the U.S. Commerce Department. The international standard for measuring GDP is contained in the System of National Accounts, compiled in 1993 by the International Monetary Fund (IMF), the European Commission, the Organization for Economic Cooperation and Development (OECD), the United Nations (UN), and the World Bank. GDP Growth RateSee also: Global GDP Growth Rate The GDP growth rate measures the percentage change in real GDP (GDP adjusted for inflation) from one period to another, typically as a comparison between the most recent quarter or year and the previous one. It can be a positive or negative number (negative growth rate, indicating economic contraction). GDP per capitaSee also: List of Countries by GDP per Capita GDP per capita is calculated by dividing nominal GDP by the total population of a country. It expresses the average economic output (or income) per person in the country. The population number is the average (or mid-year) population for the same year as the GDP figure. See also
Is its gross national product divided by its population?Gross national product (GNP) per capita is the dollar value of a country's final output of goods and services in a year, divided by its population. It reflects the average income of a country's citizens.
What is a GNP and GNP per capita?Per capita GNP (US$)
Definition: Comprises the gross domestic product (GDP), plus net factor income from abroad, which is the income residents receive from abroad for factor services (labour and capital) less similar payments made to non-residents who contributed to the domestic economy.
What is GDP of a country?Gross domestic product (GDP) is the standard measure of the value added created through the production of goods and services in a country during a certain period. As such, it also measures the income earned from that production, or the total amount spent on final goods and services (less imports).
What is a country's GDP per capita?Gross Domestic Product (GDP) per capita shows a country's GDP divided by its total population. The table below lists countries in the world ranked by GDP at Purchasing Power Parity (PPP) per capita, along with the Nominal GDP per capita.
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