GDP Calculator

The GDP (gross domestic product) can be calculated using either the expenditure approach or the resource cost-income approach below. If any clarification on the terminology or inputs is necessary, refer to the information section below the calculators.

Expenditure Approach

GDP = Personal Consumption + Gross Investment + Government Consumption + Net Exports

Personal Consumption: Gross Investment: Government Consumption: Exports: Imports:

Resource Cost-Income Approach

GNP = Employee Compensation + Proprietors' Income + Rental Income + Corporate Profits + Interest Income

GDP = GNP + Indirect Business Taxes + Depreciation + Net Income of Foreigners

Employee Compensation: Proprietors' Income: Rental Income: Corporate Profits: Interest Income: Indirect Business Taxes: Depreciation: Net Income of Foreigners:

Gross Domestic Product

Gross domestic product is defined by the Organisation for Economic Co-operation and Development (OECD) as "an aggregate measure of production equal to the sum of the gross values added of all resident and institutional units engaged in production (plus any taxes, and minus any subsidies, on products not included in the value of their outputs." More simply, it can be defined as a monetary measure of the market value of final goods produced over a period of time, typically quarterly or yearly, that is often used to determine the economic performance of a region or country. Generally, growth of more than two percent indicates significant prosperous activity in the economy. On the other hand, two consecutive three-month periods of contraction may indicate that an economy is in recession.

Measuring GDP

GDP can be measured in a number of different ways:

• Production approach: This is the gross value of the goods and services added by all sectors of the economy such as agriculture, manufacturing, energy, construction, the service sector, and the government.
• Resource cost-income approach: Consists of the addition of the value of profit and wages, as well as indirect business taxes, depreciation, and the net income of foreigners.
• Spending approach: This is the value of the goods and services purchased by households and the government, including investment in machinery and buildings.

In the United States, the Commerce Department undertakes the major project of estimating GDP using all three approaches every three months. Collecting data involves surveying hundreds of thousands of firms and households. Data is also collected from government departments overseeing activities such as agriculture, energy, health, and education, which results in an enormous amount of data. This typically results in an initial estimate being made based on a partial compilation of the data. Once the full data is available and has been analyzed (usually a few months later), a revised estimate is often released.

According to the International Monetary Fund, not all productive activity is included in estimates of GDP. For example, unpaid work (such as that performed at home or by volunteers) and black-market activities are not included because they are difficult to measure and cannot easily be verified. Thus, a baker that bakes a loaf of bread for a customer would contribute to GDP, but would not do so if he baked that same loaf for his family (but the ingredients he purchased would).