Gross domestic product

A map of world economies by size of GDP (nominal) in USD, World Bank, 2014.[1]

Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced in a specific time period by countries.[2][3] Due to its complex and subjective nature this measure is often revised before being considered a reliable indicator. GDP (nominal) per capita does not, however, reflect differences in the cost of living and the inflation rates of the countries; therefore, using a basis of GDP per capita at purchasing power parity (PPP) may be more useful when comparing living standards between nations, while nominal GDP is more useful comparing national economies on the international market.[4] Total GDP can also be broken down into the contribution of each industry or sector of the economy.[5] The ratio of GDP to the total population of the region is the per capita GDP (also called the Mean Standard of Living).

GDP definitions are maintained by a number of national and international economic organizations. The Organisation for Economic Co-operation and Development (OECD) defines GDP as "an aggregate measure of production equal to the sum of the gross values added of all resident and institutional units engaged in production and services (plus any taxes, and minus any subsidies, on products not included in the value of their outputs)".[6] An IMF publication states that, "GDP measures the monetary value of final goods and services—that are bought by the final user—produced in a country in a given period of time (say a quarter or a year)."[7]

GDP is often used as a metric for international comparisons as well as a broad measure of economic progress. It is often considered to be the "world's most powerful statistical indicator of national development and progress".[8] However, critics of the growth imperative often argue that GDP measures were never intended to measure progress, and leave out key other externalities, such as resource extraction, environmental impact and unpaid domestic work.[9] Critics frequently propose alternative economic models such as doughnut economics which use other measures of success or alternative indicators such as the OECD's Better Life Index as better approaches to measuring the effect of the economy on human development and well being.

  1. ^ "GDP (Official Exchange Rate)" (PDF). World Bank. Retrieved 24 August 2015.
  2. ^ "Finance & Development". Finance & Development | F&D. Retrieved 23 February 2019.
  3. ^ "Gross Domestic Product | U.S. Bureau of Economic Analysis (BEA)". Retrieved 23 February 2019.
  4. ^ Hall, Mary. "What Is Purchasing Power Parity (PPP)?". Investopedia. Retrieved 23 February 2019.
  5. ^ Dawson, Graham (2006). Economics and Economic Change. FT / Prentice Hall. p. 205. ISBN 0-273-69351-4.
  6. ^ "OECD". Retrieved 14 August 2014.
  7. ^ Callen, Tim. "Gross Domestic Product: An Economy's All". IMF. Retrieved 3 June 2016.
  8. ^ Lepenies, Philipp (2016). The Power of a Single Number: A Political History of GDP. New York: Columbia University strategy-3-1-33252415-37392257_9257a4574cf75f9d33bf6a486ecb145d these measures affects in greater extent, the GDP will already be drastically affected by the health crisis the world is experiencing by COVID-19, which will reduce these expectations.
  9. ^ Raworth, Kate (2017). Doughnut economics : seven ways to think like a 21st-century economist. London. ISBN 978-1-84794-138-1. OCLC 974194745.

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