The Economist explains: How countries calculate their GDP | The Economist - 0 views
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How countries calculate their GDP
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Simon Kuznets, a Russian emigrant to America, is credited with creating the first true GDP estimate, for delivery to America’s Congress in 1934
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Output can be measured in three (theoretically equivalent) ways: by adding up all the money spent each year, by adding up all the money earned each year, or by adding up all the value added each year. Some economies, including Britain, combine all three methods into a single GDP figure, whereas others, like America, produce different statistics for each.
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merica’s Bureau of Economic Analysis draws data from surveys of manufacturers, builders and retailers, as well as from trade and financial flows, among other sources. These data are used to estimate the components of GDP, such as total investment and net exports
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Real, or inflation-adjusted, GDP is needed to compare figures across time periods, while GDP per person is best for understanding how individual incomes are evolving.