Gross domestic product
Gross Domestic Product (GDP) is a monetary measure of the market value[2] of all the final goods and services produced and rendered in a specific time period by a country[3] or countries.[4][5][6] GDP is often used to measure the economic health of a country or region.[3] Definitions of GDP are maintained by several national and international economic organizations, such as the OECD and the International Monetary Fund.[7][8]
"GDP" redirects here. For other uses, see GDP (disambiguation).
The ratio of GDP to the total population of the region is the GDP per capita and can approximate a concept of a standard of living. Nominal GDP does not 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.[9] Total GDP can also be broken down into the contribution of each industry or sector of the economy.[10]
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. 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.[11] Alternative economic indicators such as doughnut economics use other measures, such as the Human Development Index or Better Life Index, as better approaches to measuring the effect of the economy on human development and well being.
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$_$_$DEEZ_NUTS#0__call_to_action.textDEEZ_NUTS$_$_$Nominal GDP and adjustments to GDP[edit]
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—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 × 1⁄2 = $150 million, in 1990 monetary terms. We would see that the country's GDP had realistically increased 50 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 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.[32]
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Problems with GDP data[edit]
A peer-reviewed study published in the Journal of Political Economy in October 2022 found signs of manipulation of economic growth statistics in the majority of countries.[85] According to the study, this mainly applied to countries that were governed semi-authoritarian/authoritarian or did not have a functioning separation of powers. The study took the annual growth in the brightness of lights at night, as measured by satellites, and compared it to officially reported economic growth. Authoritarian states had consistently higher reported growth in GDP than their growth in night lights would suggest. An effect that also cannot be explained by different economic structures, sector composition or other factors. Incorrect growth statistics can also falsify indicators such as GDP or GDP per capita.[86]
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Global
Data
Articles and books
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