Browse Definitions :
Definition

gross domestic product (GDP)

Contributor(s): Matthew Haughn

Gross domestic product (GDP) is the total amount of dollars made within a given location in the selling of all goods and services before deductions.

GDP can encompass a town, county, state or country. The period of time over which GDP is measured is variable but is commonly in fiscal quarters or years. Often, GDP is expressed as a percentage representing the increase or decrease over the previous year.

Commonly used by governments and economists to measure a region’s economic performance, GDP is a key measurement of welfare economics. If a country’s GDP is said to have grown by 4% in a year, that means the country’s economy has grown by 4%.

The measurement of GDP can be performed three different ways, but should all return approximately the same result. The three methods used to calculate a GDP include:

  • Production approach - Calculated by totaling output of enterprises.
  • Expenditure approach - Calculated by totaling the combination of goods consumed, government spending, investments and net total exports.
  • Income approach - Calculated by totaling employee compensation, corporate and non-incorporated firms’ gross profits and taxes, minus subsidies.

GDP was created as a measurement of economies by William Petty. The measurement was used to make certain landlords were not unduly taxed during the war between the English and Dutch (1652 to 1674). GDP was modernized by Simon Kuznets, who used it in a report to Congress in 1934. However, Kuznets explicitly warned against its use to measure the welfare (well-being) of citizens.

Criticisms of the GDP center around the idea that a healthy economy does not necessarily equate to the well-being of citizens. Critics argue that a better measure of how well a country is doing should include other metrics such as work-life balance, leisure time, health, poverty, crime, equality and the environment.

This was last updated in September 2017

Continue Reading About gross domestic product (GDP)

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

-ADS BY GOOGLE

File Extensions and File Formats

SearchCompliance

SearchSecurity

  • GPS jamming

    GPS jamming is the process of using a frequency transmitting device to block or interfere with radio communications.

  • time-based one-time password (TOTP)

    A time-based one-time password (TOTP) is a temporary code, generated by an algorithm, for use in authenticating access to ...

  • Security Operations Center (SOC)

    A security operations center (SOC) is a command center facility for a team of IT professionals with expertise in information ...

SearchHealthIT

SearchDisasterRecovery

  • disaster recovery team

    A disaster recovery team is a group of individuals focused on planning, implementing, maintaining, auditing and testing an ...

  • cloud insurance

    Cloud insurance is any type of financial or data protection obtained by a cloud service provider. 

  • business continuity software

    Business continuity software is an application or suite designed to make business continuity planning/business continuity ...

SearchStorage

  • SSD (solid-state drive)

    An SSD (solid-state drive) is a type of nonvolatile storage media that stores persistent data on solid-state flash memory.

  • NAND flash memory

    NAND flash memory is a type of nonvolatile storage technology that does not require power to retain data.

  • storage class memory (SCM)

    Storage class memory (SCM) is a type of NAND flash that includes a power source to ensure that data won't be lost due to a system...

Close