GDP
Gross Domestic Product
James P. Norris – Economics Instructor, Osseo Area
Schools, Minnesota
GDP = Gross Domestic Product
The dollar value of a country’s
total production of goods and
services in one year.
U.S. GDP 2014, Qtr. 1
•$16, 272, 755, 821, 000
•(approx. $16 Trillion)
Real vs. Nominal GDP
“Nominal GDP” is in the year’s
current prices.
• “Real GDP” takes out the inflation
using a price index known as “The
Deflator”.
Per Capita GDP
• GDP Per Person- Approximately the same as
per person income. GDP divided by the
population
• https://www.box.com/embed/lx4uriurbn3xeki
.swf
• Nominal Per Capita GDP - $50, 078
• Real per capita GDP (2013) - $49, 797
What is the BEA?
• The Bureau of Economic Analysis (part of the
Department of Commerce) is the agency
charged with reporting the GDP from statistics
provided by the National Bureau of Economic
Research, the NBER.
• They are found at www.bea.gov and
www.nber.org.
What is the 2013 Nominal and Real
GDP?
• Nominal GDP for 2013:
$16,759, 000, 000,000
• Real GDP for 2013:
$15,797, 000,000, 000
• Base year: 2009
Economic Growth
• GDP is reported Quarterly – 3
months at a time.
• You will see the % change in GDP
reported as GDP.
• For example, Qtr. 1, 2014, had a
.1% change. (very small)
Recession?
• Two consecutive qtrs ( 6 months) of
shrinking real GDP is one definition
of a recession (commonly used definition
– not always used by economists)
• So, are we in a recession?
• No. We are in a slow “recovery”.
The Great Recession
• According to the National Bureau of
Economic Research (NBER) and the
BEA, the Great Recession began after
December, 2007, and ended in June,
2009.
• So, we are in a slow “recovery”.
The Bureau of Economic Analysis (BEA)
reports the GDP
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Gross Domestic Product (GDP)
Current Numbers:
1st quarter 2014: 0.1 percent
4th quarter 2013: 2.6 percent
Next release: May 29, 2014
Quarterly data: Real gross domestic product -- the output of goods and services
produced by labor and property located in the United States -- increased at an
annual rate of 0.1 percent in the first quarter (that is, from the fourth quarter of
2013 to the first quarter of 2014), according to the "advance" estimate released by
the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 2.6
percent.
Highlights (PDF)
Detailed Press Release
GDP and the Economy: Advance Estimates for the First Quarter of 2014 (PDF)
Previous Releases
View Larger Image
GDP- The Expenditure Approach
• "C + I + G+ (x-im) = GDP.
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C = Consumer Expenditures
I = Business Investment (purchases)
G = Government Purchases
X = Exports
I = Imports
• This means that you can find the GDP by
adding up what consumers buy, what
business buys (investment) and what
government buys and then adjust for imports
(minus) and exports (plus)
• Your parents learned "GNP" instead of
"GDP". What's the difference in
• definition?
• http://www.learner.org/series/econusa/video
/?pid=2467&uid=15&unit=GNP/GDP
• GDP measures what U.S. companies produce
anywhere in the world. GDP measures what is
produced inside the borders of the U.S.