• Data is typically collected by national statistical agencies (Statistics Canada,
Bureau of Economic Analysis (U.S.), O ffi ce of National Statistics, U.K., etc.
• BEA source data: federal government agencies, like Commerce department’s Bureau of the Census, the Labor department’s Bureau of Labor
Statistics, the Internal Revenue Service, and other agencies of the Treasury
Department, the O ffi ce of Management and Budget, and the Agriculture
Department.
— Administrative data: byproducts of government functions like education programs, tax collection, defense, regulation.
— Nonadministrative data: periodic population and economic surveys, and wide range of sample surveys, e.g., manufacturing, farm activity, prices.

• Source data not always available at once, so BEA has to estimate.
— fi rst estimate of quarterly GDP based on monthly series on sales, shipments, and trade in goods from Census Bureau and BEA projections.
— most comprehensive source data for expenditure components of GDP are available at 5-year intervals associated with economic censuses conducted by Census Bureau.
— related annual surveys conducted on smaller sample of establishments, and smaller still for monthly surveys.
— estimates are revised as more data become available.
— a given component of GDP may be revised as many as 6 times in 5 years!

U.S. RGDP Growth per Annum
Advance and Current Estimates

• The GDP mostly measures “goods and services” that are produced and exchanged in formal markets (and recorded by government agencies).
• A serious concern that GDP is underestimated in lesser-developed economies where
— by de fi nition of “lesser developed,” less formal market places.
— not clear how comprehensive statistical agencies are in their data coverage.
• GDP does not measure the value of illegal economic activity (prostitution, drugs, etc.)

• GDP does not measure the value of unreported legal economic activity
(producing a legal service for cash and not reporting income on tax return).
• The “gross” in GDP refers to the fact that capital consumption is not recorded as an expense in producing output.
— environmentalists complain that the “true” value of production should net out environment degradation.
— GDP net of capital consumption is called Net Domestic Product (NDP).
• Finally, remember that GDP does not describe how output is distributed.

• Many goods and services produced within a household are not exchanged with third parties.
— economists call this home production, e.g., household chores, childcare, etc.—most of this production is not counted in the GDP.
— however—e.g., imputed rental income for owner-occupied housing is counted (inconsistent?).
• Consider two neighbors, where each household cuts their own lawn.
— suppose each neighbor pays the other $10 to have their lawn cut—then measured GDP goes up by $20.

• Despite all the caveats, it remains a useful summary statistic.
• Even if the level is mismeasured, the change in the level can be informative.
• We just need to be careful in making comparisons across long periods of time and across countries.

World RGDP per capita

U.S. RGDP

Selected Countries
PPP = purchasing power parity

RGDP Selected Countries