The gross domestic product (GDP) or gross domestic income (GDI) is a measure of a country's overall official economic output. It is the market value of all final goods and services officially made within the borders of a country in a year. It is often positively correlated with the standard of living Standard of living is generally measured by standards such as real income per person and poverty rate. Other measures such as access and quality of health care, income growth inequality and educational standards are also used. Examples are access to certain goods (such as number of refrigerators per 1000 people), or measures of health such as life,[1] though its use as a stand-in for measuring the standard of living has come under increasing criticism and many countries are actively exploring alternative measures to GDP for that purpose.[2]

Gross domestic product comes under the heading of national accounts National accounts or national account systems provide a complete and consistent conceptual framework for measuring the economic activity of a nation (or other geographic area in the broader term social accounts). These include detailed underlying measures that rely on double-entry accounting. By construction such accounting makes the totals on, which is a subject in macroeconomics Macroeconomics (from Greek prefix "macr-" meaning "large" + "economics") is a branch of economics that deals with the performance, structure, behavior and decision-making of the entire economy, be that a national, regional, or the global economy. With microeconomics, macroeconomics is one of the two most general. Economic measurement is called econometrics Econometrics is concerned with the tasks of developing and applying quantitative or statistical methods to the study and elucidation of economic principles. Econometrics combines economic theory with statistics to analyze and test economic relationships. Theoretical econometrics considers questions about the statistical properties of estimators.

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Determining GDP

Economics Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek οἰκονομία from οἶκος (oikos, "house") + νόμος (nomos, "custom" or "law"), hence "rules of the house(hold)". Current economic
Economies by region

Africa The biggest contrast in terms of development has been between Africa and the economy of Asia. The African Economic Outlook report specifically mentions that Africa’s trade with China has multiplied by 10 since 2001, reaching over USD 100 billion in 2008. The economies of China and India have grown rapidly, while Latin America has also · North America The economy of North America comprises more than 514 million people in 23 sovereign states and 15 dependent territories. It is marked by a sharp division between the predominantly English speaking countries of Canada and the United States, which are among the wealthiest and most developed nations in the world, and the countries of Central America South America As of early 2007, South America is experiencing great economic development, with Venezuela, Colombia, Argentina, Uruguay and Peru growing their economies by over 8% per annum. Brazil's economy, on the other hand, is expected to grow by a more sluggish pace during the year · Asia The economy of Asia comprises more than 4 billion people living in 46 different states. Six further states lie partly in Asia, but are considered to belong to another region economically and politically Europe The economy of Europe comprises more than 831.4 million people in 48 different states . Like other continents, the wealth of Europe's states varies, although the poorest are well above the poorest states of other continents in terms of GDP and living standards. The difference in wealth across Europe can be seen in a rough East-West divide. Whilst · Oceania On a total scale the region has approximately 34,700,201 inhabitants who are spread among 30,000 islands[citation needed] in the South Pacific bordered between Asia and the Americas. This region has a diverse mix of economies from the highly developed and globally competitive financial markets of Australia and New Zealand (2nd) boasting parity
General categories Economics is the social science that studies the production, distribution, and consumption of goods and services. By extension, economics also studies economic systems, human welfare, the creation and distribution of wealth, and the scarcity and alternative uses of resources

Microeconomics Microeconomics is a branch of economics that studies how the individual parts of the economy, the household and the firms, make decisions to allocate limited resources, typically in markets where goods or services are being bought and sold. Microeconomics examines how these decisions and behaviours affect the supply and demand for goods and · Macroeconomics Macroeconomics (from Greek prefix "macr-" meaning "large" + "economics") is a branch of economics that deals with the performance, structure, behavior and decision-making of the entire economy, be that a national, regional, or the global economy. With microeconomics, macroeconomics is one of the two most general History of economic thought The history of economic thought deals with different thinkers and theories in the subject that became political economy and economics from the ancient world to the present day. It encompasses many disparate schools of economic thought. Greek writers such as the philosopher Aristotle examined ideas about the "art" of wealth acquisition Methodology Economic methodology is the study of methods, usually scientific method, in relation to economics, including principles underlying economic reasoning. The term 'methodology' is also commonly, though incorrectly, used as an impressive synonym for method. Rather, methodology is the study of method(s) · Heterodox approaches Heterodox economics refers to the approaches, or schools of economic thought, that are considered outside of mainstream, that is, orthodox economics. Heterodox economics is an umbrella term used to cover various separate unorthodox approaches, schools, or traditions. These include institutional, post-Keynesian, socialist, Marxian, feminist,
Techniques Articles in economics journals are usually classified according to the JEL classification codes, a system originated by the Journal of Economic Literature . The JEL is published quarterly by the American Economic Association (AEA) and contains survey articles and information on recently published books and dissertations. The AEA maintains EconLit,

Mathematical Mathematical economics refers to the application of mathematical methods to represent economic theories and analyze problems posed in economics. It allows formulation and derivation of key relationships in a theory with clarity, generality, rigor, and simplicity. Mathematics allows economists to form meaningful, testable propositions about many · Econometrics Econometrics is concerned with the tasks of developing and applying quantitative or statistical methods to the study and elucidation of economic principles. Econometrics combines economic theory with statistics to analyze and test economic relationships. Theoretical econometrics considers questions about the statistical properties of estimators Experimental Experimental economics is the application of experimental methods to study economic questions. Experiments are used to test the validity of economic theories and test-bed new market mechanisms. Using cash-motivated subjects, economic experiments create real-world incentives to help us better understand why markets and other exchange systems work · National accounting National accounts or national account systems provide a complete and consistent conceptual framework for measuring the economic activity of a nation (or other geographic area in the broader term social accounts). These include detailed underlying measures that rely on double-entry accounting. By construction such accounting makes the totals on
Fields and subfields Articles in economics journals are usually classified according to the JEL classification codes, a system originated by the Journal of Economic Literature . The JEL is published quarterly by the American Economic Association (AEA) and contains survey articles and information on recently published books and dissertations. The AEA maintains EconLit,

Behavioral Behavioral economics and its related area of study, behavioral finance, use social, cognitive and emotional factors in understanding the economic decisions of individuals and institutions performing economic functions, including consumers, borrowers and investors, and their effects on market prices, returns and the resource allocation. The fields · Cultural Cultural economics is the branch of economics that studies the relation of culture to economic outcomes. Programmatic issues include whether and how much culture matters as to economic outcomes and what its relation is to institutions · Evolutionary Evolutionary economics is a heterodox school of economic thought that is inspired by evolutionary biology. Much like mainstream economics, it stresses complex interdependencies, competition, growth, structural change, and resource constraints but differs in the approaches which are used to analyze these phenomena Growth Economic growth is the increase of per capita gross domestic product or other measure of aggregate income. It is often measured as the rate of change in GDP. Economic growth refers only to the quantity of goods and services produced · Development Development economics is a branch of economics which deals with economic aspects of the development process in low-income countries. Its focus is not only on methods of promoting economic growth and structural change but also on improving the potential for the mass of the population, for example, through health and education and workplace · History Economic history is the study of how economic phenomena evolved from a historical perspective. Analysis in economic history is undertaken using a combination of historical methods, statistical methods and by applying economic theory to historical situations. The topic includes business history, financial history and overlaps with areas of social International International economics is concerned with the effects upon economic activity of international differences in productive resources and consumer preferences and the institutions that affect them. It seeks to explain the patterns and consequences of transactions and interactions between the inhabitants of different countries, including trade, · Economic systems An economic system is the system of production, distribution and consumption of goods and services of an economy. Alternatively, it is the set of principles and techniques by which problems of economics are addressed, such as the economic problem of scarcity through allocation of finite productive resources. The economic system is composed of Monetary Monetary economics is a branch of economics that historically prefigured and remains integrally linked to macroeconomics. It provides a framework for analyzing money in its functions as a medium of exchange, store of value, and unit of account. It considers how money, for example fiat currency, can gain acceptance purely because of its convenience and Financial economics Financial economics is the branch of economics concerned with "the allocation and deployment of economic resources, both spatially and across time, in an uncertain environment". It is additionally characterised by its "concentration on monetary activities", in which "money of one type or another is likely to appear on both Public Public economics is the study of economic issues concerning the public sector (including government) and its interface with the private sector (including households, businesses, and markets) in a mixed economy. It has been described as an amalgam of two older fields, (applied) public finance and welfare economics, each edging toward disrepute, to and Welfare economics Welfare economics is a branch of economics that uses microeconomic techniques to evaluate economic well-being, especially relative to competitive general equilibrium within an economy as to economic efficiency and the resulting income distribution. associated with it. It analyzes social welfare, however measured, in terms of economic activities of Health Health economics is a branch of economics concerned with issues related to scarcity in the allocation of health and health care. In broad terms, health economists study the functioning of the health care system and the private and social causes of health-affecting behaviors such as smoking · Education Education economics or the economics of education is the study of economic issues relating to education, including the demand for education and the financing and provision of education · Welfare Welfare or welfare work consists of actions or procedures — especially on the part of governments and institutions — striving to promote the basic well-being of individuals in need. These efforts usually strive to improve the financial situation of people in need but may also strive to improve their employment chances and many other aspects of Population Demographic economics or population economics is the application of economics to demography, the study of human populations, including size, growth, density, distribution, and vital statistics. Analysis includes economic determinants and consequences of marriage and fertility, the family, divorce, morbidity and mortality, dependency ratios, · Labour Labour economics seeks to understand the functioning and dynamics of the market for labour. Labour markets function through the interaction of workers and employers. Labour economics looks at the suppliers of labour services , the demanders of labour services (employers), and attempts to understand the resulting pattern of wages, employment, and · Managerial Managerial economics , is a branch of economics that applies microeconomic analysis to decision methods of businesses or other management units. As such, it bridges economic theory and economics in practice. It draws heavily from quantitative techniques such as regression analysis and correlation, Lagrangian calculus (linear). If there is a Business Business economics is that part of economic theory which focuses on business enterprises and inquires into the factors contributing to the diversity of organizational structures and to the relationships of firms with labour, capital and product markets · Information Information economics or the economics of information is a branch of microeconomic theory that studies how information affects an economy and economic decisions. Information has special characteristics. It is easy to create but hard to trust. It is easy to spread but hard to control. It influences many decisions. These special characteristics · Game theory Game theory is a branch of applied mathematics that is used in the social sciences, most notably in economics, as well as in biology , engineering, political science, international relations, computer science, and philosophy. Game theory attempts to mathematically capture behavior in strategic situations, or games, in which an individual's success Industrial organization Industrial organization is a field of economics that studies the strategic behavior of firms, the structure of markets and their interactions. The study of industrial organization adds to the perfectly competitive model real-world frictions such as limited information, transaction cost, cost of adjusting prices, government actions, and barriers to · Law Law and economics is an approach to legal theory that applies methods of economics to law. It includes the use of economic concepts to explain the effects of laws, to assess which legal rules are economically efficient, and to predict which legal rules will be promulgated Agricultural Agricultural economics originally applied the principles of economics to the production of crops and livestock — a discipline known as agronomics. Agronomics was a branch of economics that specifically dealt with land usage. It focused on maximizing the yield of crops while maintaining a good soil ecosystem. Throughout the 20th century the · Natural resource Natural resource economics deals with the supply, demand, and allocation of the Earth's natural resources. One main objective of natural resource economics is to better understand the role of natural resources in the economy in order to develop more sustainable methods of managing those resources to ensure their availability to future generations Environmental Environmental economics is a subfield of economics concerned with environmental issues. Quoting from the National Bureau of Economic Research Environmental Economics program: · Ecological Ecological economics is a transdisciplinary field of academic research that aims to address the interdependence and coevolution of human economies and natural ecosystems over time and space. 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GDP can be determined in three ways, all of which should in principle give the same result. They are the product (or output) approach, the income approach, and the expenditure approach.

The most direct of the three is the product approach, which sums the outputs of every class of enterprise to arrive at the total. The expenditure approach works on the principle that all of the product must be bought by somebody, therefore the value of the total product must be equal to people's total expenditures in buying things. The income approach works on the principle that the incomes of the productive factors ("producers," colloquially) must be equal to the value of their product, and determines GDP by finding the sum of all producers' incomes.[3]

Example: the expenditure method:

GDP = private consumption + gross investment + government spending + (exports − imports), or

Note: "Gross" means that GDP measures production regardless of the various uses to which that production can be put. Production can be used for immediate consumption, for investment in new fixed assets or inventories, or for replacing depreciated fixed assets. "Domestic" means that GDP measures production that takes place within the country's borders. In the expenditure-method equation given above, the exports-minus-imports term is necessary in order to null out expenditures on things not produced in the country (imports) and add in things produced but not sold in the country (exports).

Economists (since Keynes) have preferred to split the general consumption term into two parts; private consumption, and public sector (or government) spending. Two advantages of dividing total consumption this way in theoretical macroeconomics are:

Income Approach

This method measures GDP by adding the incomes that firms pay households for the factors of production they hire- wages for labor, interest for capital, rent for land and profits for entrepreneurship.

--The US "National Income and Expenditure Accounts" divide incomes into five categories:

--Two adjustments must be made to get GDP:

1. Indirect taxes minus subsidies are added to get from factor cost to market prices. 2. Depreciation (or capital consumption) is added to get from net domestic product to gross domestic product.

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complicit in providing the two key ingredients the money and the deregulation The fact is that if Clinton and Greenspan had not created this housing surge the US would have had a negative GDP for three years after Clinton left office This was the combined loss of jobs in the US over his term and the interest rates George Bush was correct when he said he inherited a recession

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Everyone is talking about China this week, and rightfully so, as its . GDP. is nearing Japan's and could become the second largest in the world. But is it sustainable? Or a boom-and-bust similar to the Mayfly? ...

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