Gross Domestic Product (English: Gross Domestic Product, abbreviation : GDP), China calls Gross domestic product , Taiwan also calls Gross domestic production , also known as Gross domestic production , also known as Gross domestic production , Gross Domestic Product , when describing regional production, it is called Gross Regional Product , which is the market value of all the final results ( product and labor ) in a certain period of time (one quarter or one years ) in a region's economic activities (market value). GDP is the core indicator of national economic accounting , and is also of great importance in measuring the economic status and development level of a country or region.
GDP and GDP are different from GDP (GNP) in that:
1. GDP does not count the transfer of income between countries; that is, Gross Domestic Product GDP GDP3 calculates the value of products produced in a region, while Gross National Product GNP calculates the actual productive income obtained by a region. To put it simply, GDP is territorialism, and GNP is humanism. For example, manufacturers in Taiwan, Hong Kong, South Korea or the United States, manufactured goods produced in mainland China are included in mainland China's GDP, and this value also includes the wages of immigrant workers.
2. GDP is the sum of domestic production and added value; while GDP GNP is the total value of dividends and interest in foreign production in addition to GDP. Therefore, if you pay attention to the economic development of GNP, you will pay more attention to overseas investment and production, but only focus on GNP and ignore GDP economic development may cause domestic industry hollowing out.
Calculation formula
Production surface
is also called the final output method. First distinguish the first to third-level industries in society, and then add up the added output value of each industry.
Gross Domestic Product = Putput value of primary industry + Secondary industry output value of secondary industry + Terminal industry Putput value of
The primary industry includes economic activities to extract natural resources such as planting and fishery, the secondary industry includes economic activities to convert natural resources into finished or semi-made products, and the tertiary industry includes economic activities to provide services such as commerce, tourism, and retail.
Gross domestic product obtained by this method is calculated based on factor costs. If indirect tax is added and subsidies are deducted, the GDP calculated based on market price will be obtained.
Distribution polygon
, also known as the income polygon method, uses the sum of income of various production factors to estimate.
GDP = W + R + I + π
W = salary, R = land rent, I = Interest, π = Profit
The GDP obtained by this method is also calculated based on factor cost. If indirect tax is added and subsidies are deducted, the GDP calculated based on market price will be obtained.
The gross domestic product calculated by this method is also called the total local income.
human face
GDP = c + s + t
in c = consumption, s = saving, t = saving, t = Tax
expenditure
, also known as the end-use measurement method, is estimated from the expenses of the final product buyer.
GDP = C + I + G + G + (X - M)
in C = Private consumption expenditure, I = total investment, G = government consumption expenditure, X = total export value, M = total import value
Since the total export value minus the total import value is equal to Net export (NX), the formula can be expressed as:
GDP = C + I + G + NX
Gross Domestic Product Exports are calculated because the goods produced by local companies are not necessarily reflected in local private consumption (C) and government expenditure (G). Exported goods or services are also the production income of companies based on local bases and should be calculated within the GDP. Imported components must be reduced because local consumption or investment may contain imported goods or services, and these expenses are not local production income.
Gross domestic product obtained by this method is calculated based on market price. If subsidies are added and indirect tax is deducted, the GDP calculated based on factor costs will be obtained.
calculation method
Since GDP reflects the value of all the final products and services produced in a country or region's economy, the price level is constantly changing. Nominal GDP refers to the sum of the prices of total domestic products and services in a given period calculated at the current market price. Nominal GDP contains factors of price level, so if our current price level doubles, then the nominal GDP will also double. Therefore, there is great uncertainty in the nominal GDP, especially during the period when inflation is severe. At this time, people introduced the concept of substantial GDP.
The substantial GDP in economics does not abandon the factors of changing prices, but uses the price level of the base year. For example, the nominal GDP in 2011 is calculated using the prices in 2011, while the actual GDP is calculated using the prices in 2000 (assuming 2000 as the base year).
Comparison of each country
Comparison of GDP between different countries requires the conversion of currencies of each country. There are two main ways to convert:
- uses the international exchange rate conversion of currencies of each country;
- is based on the purchasing power parity of each country's currencies and a selected standard (usually US dollars). The GDP rankings of each country obtained by
in two ways will be very different, because if the international exchange rate is used, the currency of developing countries will be underestimated by 50~60% of the purchasing power of domestic consumers and manufacturers; however, if purchasing power parity is used, it is impossible to accurately calculate the country's products and services in the international market.
Gross Domestic Product is divided into nominal GDP and substantial GDP. Among them, the nominal GDP is the value of the GDP calculated at the current price level, which not only contains information on current output but also information on the country's price level in the current period. The substantial GDP is the value of GDP calculated at the benchmark price level. Gross Domestic Product Deflating Index Price level measurement indicators calculated using the ratio of nominal GDP to substantial GDP.
Currently, there are 3 organizations that conduct statistical comparisons of the GDP of countries around the world, namely International Monetary Fund , World Bank and US Central Intelligence Agency (including in its published " World Overview ".
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