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Gross domestic product
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Gross domestic product

In economics, the gross domestic product (GDP) is a measure of the amount of the economic production of a particular territory in financial capital terms during a specific time period.

Table of contents
1 Definition
2 Problems
3 List of total GDP by country (Purchasing Power Parity Method)
4 List of total GDP by country (Current Exchange Rate Method)
5 See also
6 External links

Definition

GDP is defined as the total value of all goods and services produced within that territory during a specified period (most commonly, per year). GDP differs from gross national product in excluding inter-country income transfers, in effect attributing to a territory the product generated within it rather than the incomes received in it.

Whereas nominal GDP refers the total amount of money spent on GDP, real GDP refers to an effort to correct this number for the effects of inflation in order to estimate the sum of the actual quantity of goods and services making up GDP. The former is sometimes called "money GDP," while the latter is termed "constant-price" or "inflation-corrected" GDP -- or "GDP in base-year prices" (where the base year is chosen arbitrarily). See real vs. nominal in economics.

A common equation for GDP is:

GDP = consumption + investment + government expenditures + exports - imports

Aggregate expenditures are calculated in a similar way, although the aggregate expenditures formula does not account for unplanned investment (left over inventory at the end of the reporting cycle) and is more commonly used by economic theorists.

GDPs of different countries may be compared by converting their value in national currency according to either

The relative ranking of countries may differ dramatically between the two approaches.

The purchasing power parity method accounts for the relative effective domestic purchasing power of the average producer or consumer within an economy. This can be a better indicator of the living standards of less-developed countries because it compensates for the weakness of local currencies in world markets.

The current exchange rate method converts the value of goods and services using global currency exchange rates. This can offer better indications of a country's international purchasing power and relative economic power.

For more information see measures of national income.

Problems

Although GDP is widely used by economists, its value as an indicator has also been the subject of controversy. Criticisms of GDP include:

List of total GDP by country (Purchasing Power Parity Method)

Rank Entity PPP total PPP/capita Population
(U.S dollars) (U.S dollars) (2003 est.)
'''European Union* 11.50 trillion 25,300 454,900,000
1. United States 10.40 trillion 37,600 290,343,000
2. Mainland China 5.70 trillion 4,400 1,287,000,000
3. Japan 3.55 trillion 28,000 127,215,000
4. India 2.66 trillion 2,540 1,049,701,000
5. Germany 2.18 trillion 26,600 82,399,000
6. France 1.54 trillion 25,700 60,181,000
7. United Kingdom 1.52 trillion 25,300 60,095,000
8. Italy 1.44 trillion 25,000 57,998,000
9. Russia 1.35 trillion 9,300 144,526,000
10. Brazil 1.34 trillion 7,600 182,032,000
11. South Korea 931 billion 19,400 48,249,000
12. Canada 923 billion 29,400 32,207,000
13. Mexico 900 billion 9,000 104,908,000
14. Spain 828 billion 20,700 40,218,000
15. Indonesia 663 billion 3,100 234,894,000
16. Australia 528 billion 27,000 19,732,000
17. Turkey 468 billion 7,000 68,110,000
18. Iran 456 billion 7,000 68,279,000
19. Netherlands 434 billion 26,900 16,151,000
20. South Africa 432 billion 10,000 42,769,000
21. Thailand 429 billion 6,900 70,000,000
22. Taiwan 406 billion 18,000 22,116,000
23 . Argentina 391 billion 10,200 38,000,000
24. Poland 368 billion 9,500 38,000,000

(1) Although the European Union is not formally a nation, it is tied together with a single currency (excluding the UK, Sweden, Denmark, and the 10 new member states) and is considered by some to be a single entity.

The methodology for deriving accurate PPP comparisons remains under constant review, and questions have been raised as to whether the relative size of Mainland China's GDP may be overstated to some extent.

Source: CIA World Factbook: PPP, PPP/Capita, Population

For further data, see List of countries by GDP (PPP)

List of total GDP by country (Current Exchange Rate Method)

Total GDP 2003 (millions of Ranking Economy US dollars). The ranking is different to the list above, which uses PPP method

(If changing numbers, please use the same source for all countries)

USD 10,881,609 -- United States
  • USD 4,326,444 -- Japan
  • USD 2,400,655 -- Germany
  • USD 1,794,858 -- United Kingdom
  • USD 1,747,973 -- France
  • USD 1,465,895 -- Italy
  • USD 1,409,852 -- Mainland China
  • USD 836,100 -- Spain
  • USD 834,390 -- Canada
  • USD 626,080 -- Mexico
  • USD 605,331 -- South Korea
  • USD 598,966 -- India
  • USD 518,382 -- Australia
  • USD 511,556 -- Netherlands
  • USD 492,338 -- Brazil
  • USD 433,491 -- Russian Federation
  • USD 309,465 -- Switzerland
  • USD 302,217 -- Belgium
  • USD 300,795 -- Sweden
  • USD 251,456 -- Austria
  • USD 237,972 -- Turkey
  • USD 221,579 -- Norway
  • USD 212,404 -- Denmark
  • USD 209,563 -- Poland
  • USD 208,311 -- Indonesia

  • Source: Worldbank

    For further data, see list of countries by GDP.

    See also

    External links