gross domestic product

= GDP

The monetary value of all the goods and services produced by an economy over a specified period. It is measured in three ways:

• (1) on the basis of expenditure, i. e. the value of all goods and services bought, including consumption, capital expenditure, increase in the value of stocks, government expenditure, and exports less imports;

• (2) on the basis of income, i. e. income arising from employment, self-employment, rent, company profits (public and private), and stock appreciation;

• (3) on the basis of the value added by industry, i. e. the value of sales less the costs of raw materials. In the UK, statistics for GDP are published monthly by the government on all three bases, although there are large discrepancies between each measure. Economists are usually interested in the real rate of change of GDP to measure the performance of an economy, rather than the absolute level of GDP. See also GDP deflator; gross national product; net national product