Examples of GDP
Examples of GDP
Where does GDP come from?
One prominent way to assess a country’s economy—and compare it to others—is by calculating its gross domestic product, or GDP, a term that describes the overall value of all the goods and services made within a single country. (Even by foreign-owned companies) In the US, the Bureau of Economic Analysis provides an estimate of GDP and its growth rate each quarter, called a nominal GDP. Real GDP, usually calculated on yearly terms, accounts for inflation and deflation.
What separates the concept of GDP from GNI, or gross national income, is that the former measures product made within a country, whereas the latter measures product made specifically by the citizens of that country. The GDP growth rate of an individual country is the calculation of how much the country’s GDP is growing from quarter to quarter.
Ecuador’s gdp annual growth rate to stand at 1.30 in 12 months time & it is projected to trend around 1.30 percent in 2020 (Trading Economics 2018). #economics #growthmanagement pic.twitter.com/3zMbNbF9XM
— Melanie James (@Melanie58253834) November 13, 2018
English economist William Petty devised the original concept of measuring GDP in the late 1600s as a way of preventing excessive taxation against landlords, although he notably never used the term GDP.
In 1944, the Bretton Woods Conference established international standards and cooperation among 44 countries, and GDP was established as the standard measurement of economic growth within a country. The phrase gross domestic product was in use by the 1950s, its common abbreviation, GDP, by the 1960s. The word gross as used here means “entire” or “total,” e.g., “the gross amount.”
Who uses GDP?
The modern establishment of GDP began in response to the economic devastation of the Great Depression. In 1937, economist Simon Kuznets charted all economic production within the United States from 1929 to 1935, both positive and negative, and presented his “national income” results to Congress. As the United States considered entering WWII amidst widespread fear of another economic catastrophe, Kuznets’s GDP statistics were used to demonstrate that entering the war would not prevent the country’s economic recovery.
I got lots of questions on my earlier post about output gap estimates that are suspect. So here's a bit more detail. Chart shows real GDP levels for the US, the Euro zone, and key Euro periphery countries. Real GDP levels have diverged massively since 2008. pic.twitter.com/hbydJ4eLuZ
— Robin Brooks (@RobinBrooksIIF) November 12, 2018
In understanding GDP, economists stress that GDP is not an evaluation of economic or social well-being, since a high GDP could still exist despite economic turmoil or income inequality. This distinction continues to be misunderstood to this day—though some understand it quite well, such as Jigme Singye, who become the king of Bhutan in 1972 and stated that his purpose was to, rather than increase the GDP, increase its GNH, or gross national happiness.
— World Economic Forum (@wef) November 12, 2018
Economic measurements closely related to GDP include GNP (gross national product), now often called GNI, or gross national income, which adds a country’s GDP to all the income made by its citizens living abroad.
— David Ndii (@DavidNdii) November 12, 2018
— Reuters Top News (@Reuters) November 11, 2018