23 Facts About GDP

Total GDP can be broken down into the contribution of each industry or sector of the economy.

GDP definitions are maintained by a number of national and international economic organizations.

GDP is often used as a metric for international comparisons as well as a broad measure of economic 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.

The modern concept of GDP was first developed by Simon Kuznets for a 1934 U S Congress report, where he warned against its use as a measure of welfare.

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The role that measurements of GDP played in World War II was crucial to the subsequent political acceptance of GDP values as indicators of national development and progress.

GDP became truly global in 1993 when China officially adopted it as its indicator of economic performance.

GDP can be determined in three ways, all of which should, theoretically, give the same result.

Second way of estimating GDP is to use "the sum of primary incomes distributed by resident producer units".

Third way to estimate GDP is to calculate the sum of the final uses of goods and services measured in purchasers' prices.

GDP is the sum of consumption (C), investment (I), government Expenditures (G) and net exports (X – M).

GDP can be contrasted with gross national product or, as it is known, gross national income (GNI).

The difference is that GDP defines its scope according to location, while GNI defines its scope according to ownership.

GDP is product produced within a country's borders; GNI is product produced by enterprises owned by a country's citizens.

International standard for measuring GDP is contained in the book System of National Accounts, which was prepared by representatives of the International Monetary Fund, European Union, Organisation for Economic Co-operation and Development, United Nations and World Bank.

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, or constant, GDP.

Constant-GDP figures allow us to calculate a GDP growth rate, which indicates how much a country's production has increased compared to the previous year.

For example, many environmentalists argue that GDP is a poor measure of social progress because it does not take into account harm to the environment.

GDP said that it "does not allow for the health of our children, the quality of their education or the joy of their play.

Instances of GDP measures have been considered numbers that are artificial constructs.

Sarah Arnold, Senior Economist at the New Economics Foundation stated that "GDP includes activities that are detrimental to our economy and society in the long term, such as deforestation, strip mining, overfishing and so on".

Some have pointed out that GDP did not adapt to sociotechnical changes to give a more accurate picture of the modern economy and does not encapsulate the value of new activities such as delivering price-free information and entertainment on social media.