Gross Domestic Product (GDP)

What is GDP?

Gross domestic product (GDP) is a measure of a country’s production using the sum of the final goods and services produced within its borders.

The OECD (Organisation for Economic Cooperation and Development) defines GDP as “an aggregate measure of production equal to the sum of the gross values added of all resident institutional units engaged in production (plus any taxes, and minus any subsidies, on products not included in the value of their outputs).”1)http://stats.oecd.org/glossary/detail.asp?ID=1163 Retrieved 12 December 2014 First developed in 1934, GDP is used to measure the size of a country’s economy by adding all private and public consumption, government spending, investments and exports.

GDP can be calculated as:
GDP = C + G + I + NX

  • C is consumer spending
  • G is government spending
  • I is investments
  • NX is total exports, minus imports

Figured annually, GDP can help determine the efficacy of economic policy. As of 2013, the United States leads the world in GDP, with US$17.4 trillion.2)National Income and Product Accounts. Bureau of Economic Analysis. http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm Retrieved 2014. Global GDP is nearly US$75 trillion.3)World Economic Outlook. International Monetary Fund. October 2014. http://www.imf.org/external/pubs/ft/weo/2014/02/weodata/weorept.aspx?pr.x=71&pr.y=15&sy=2013&ey=2013&scsm=1&ssd=1&sort=country&ds=.&br=1&c=001%2C998%2C901%2C511&s=NGDPD&grp=1&a=1 Retrieved 12 December 2014

Top 10 Countries by Projected 2014 GDP (trillions of US$)

4)World Economic Outlook. International Monetary Fund. October 2014. http://www.imf.org/external/pubs/ft/weo/2014/02/weodata/weorept.aspx?pr.x=71&pr.y=15&sy=2013&ey=2013&scsm=1&ssd=1&sort=country&ds=.&br=1&c=001%2C998%2C901%2C511&s=NGDPD&grp=1&a=1 Retrieved 12 December 2014

Country 2014 Projected GDP
1 United States $17.4
2 China $10.3
3 Japan $4.7
4 Germany $3.8
5 France $2.9
6 United Kingdom $2.8
7 Brazil $2.2
8 Italy $2.1
9 Russia 2
10 India $2
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References   [ + ]

1. http://stats.oecd.org/glossary/detail.asp?ID=1163 Retrieved 12 December 2014
2. National Income and Product Accounts. Bureau of Economic Analysis. http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm Retrieved 2014.
3, 4. World Economic Outlook. International Monetary Fund. October 2014. http://www.imf.org/external/pubs/ft/weo/2014/02/weodata/weorept.aspx?pr.x=71&pr.y=15&sy=2013&ey=2013&scsm=1&ssd=1&sort=country&ds=.&br=1&c=001%2C998%2C901%2C511&s=NGDPD&grp=1&a=1 Retrieved 12 December 2014