GDP per capita definition in economics. Gross domestic product and methods of its calculation. GDP of Russia and other countries

Gross domestic product is the total cost of final goods and services, produced on the territory of a given country, regardless of whether they are owned by residents of that country or owned by foreigners.

Gross domestic product is used to characterize the output of production, the level of economic development and the pace of economic development.

Gross domestic product measures the market value of all final goods and services produced within a country during the year, so it is monetary indicator.

An important condition for calculating GDP is elimination of double counting. The production of any product goes through several stages: first, raw materials are converted into intermediate goods and then sold to another company to produce finished goods. GDP does not take into account the value of goods in intermediate stages and only takes into account the market value of the final product. This is done because the cost of the final product already includes intermediate stages and goods. If we take into account the cost of the goods at intermediate stages, then there will be re-count, overestimating the real size of GDP.

The chemical plant sells washing powder to a consumer service enterprise for 500 thousand rubles per year, and a private boiler house provides electricity and hot water supply (the annual cost of services is 600 thousand rubles per year). The consumer service enterprise provides services worth 2 million rubles to local residents per year. How much does GDP increase as a result?

Answer: At 2 million rubles, because intermediate consumption is taken into account as part of the final product (household services).

• Gross domestic product is calculated on a territorial basis. It takes into account the cost of products regardless of the nationality of enterprises located in a given country.
• Gross national product is the value of the national economy, regardless of the location of the national enterprise.

That is, GDP takes into account all goods and services produced on the territory of a given country, and GNP takes into account all goods and services produced by national enterprises, regardless of the place of production.

GDP = - (the difference between factor income receipts from abroad and factor income received by foreign investors in a given country).

Gross domestic product is the main indicator of economic activity in the country. However, it does not give a true picture of the population’s quality of life and level of well-being. To more accurately assess the well-being of the population, countries use such indicators as net national income and national income.

GDP items

The following articles are not included:

• Scholarship for a student studying at a university's budget department - transfer.
• The value of shares sold on the secondary market is a financial transaction.
• Family expenses for buying a used car are not taken into account in GDP because resale was previously included in GDP.
• Interest on government bonds received by an individual is interest on government securities.
• Income from shadow business is not included, although some attempts are made to estimate this income indirectly.
• 50 rubles received by a grandson from his grandmother to buy ice cream - transfer
• Purchase of an imported BMW car by a private motor transport enterprise - Household and government final consumption expenditures and investment expenditures include the costs of both domestic and imported products (with a plus sign), but the costs of these same imported goods are taken into account when calculating net exports (with a minus sign ), so that ultimately the amount of imports does not affect GDP.
• Dividends paid at the end of the year to Russian shareholders of an American corporation located in America are not included in GDP, but are included in GNP (GNI in the modern version of the SNA).

Ambiguous situations

• Sale of crude oil by a Russian oil company to a Russian refinery. If the value of this oil attributable to intermediate consumption is simply added to GDP, a double count arises. Therefore, this value will be taken into account further when the value of the final products produced using this oil is included in GDP, or its elements will be included in GDP when calculated based on the summation of added values.

GDP, gross domestic product, is the total amount of services and goods produced in a country over a given amount of time.

This is the most important indicator of the economy of any country, allowing one to assess the level of development of industry, production, agriculture of the country, and the level of well-being of its inhabitants.

Usually the annual GDP of a state is assessed, but sometimes, if an intermediate assessment is required, smaller periods can be used - a month, a quarter, a half-year.

What is GDP: in simple words

GDP, gross domestic product, is the most important indicator of the health of a country's economy. If GDP grows steadily, it means that the state’s economy is developing: new industries and enterprises appear, and those that are already operating increase the number of goods produced.

Growing GDP means that every year the population of the state receives more and more opportunities to work, earn money, and satisfy their needs. A decrease in GDP signals that the closest attention should be paid to the country’s economy and production sector, since, most likely, we are talking about a fall in production, a reduction in jobs, and population incomes.

GDP per capita

GDP per capita is calculated by dividing the total GDP by the number of people living in the country.

Calculations can be carried out taking into account the entire population or according to certain standards, for example, taking into account only adults. An “adult equivalent” scheme may be used, where different weights are applied when converting children into adult equivalents (the younger the child, the lower their equivalent weight).

Russia's GDP

The Russian economy today ranks fifth in the world ranking in terms of GDP (according to World Bank data). In 2014, Russia's GDP amounted to $3,745 billion.

In terms of nominal GDP for 2014, Russia ranks ninth or tenth (depending on the current dollar exchange rate): the value of nominal GDP last year amounted to $1,861 billion.

If we talk about GDP per capita, the situation here is less joyful: Russia ranks only 44th in the world in terms of this indicator.

According to data obtained for 2014, the share of the Russian economy in the world is 3.3%.

GDP ratio

There are two types of GDP indicator:

1. Nominal. Calculations are carried out in prices of the current period.
2. Real. The calculations take into account the prices of the comparable previous period (usually a year).

Calculating real GDP allows us to eliminate the impact of rising prices on the indicator, determining the growth of the state’s economy. The ratio of nominal to real GDP also makes it possible to assess the state of the economy and the rapidity of price growth.

Components of GDP

The GDP of any state consists of goods that are tangible and intangible (services). The calculation takes into account services and goods produced only in this country in one year. This includes the total cost of leather sofas and cars produced, the cost of baked goods and patients treated in hospitals, the cost of repairs in cottages and children's overalls, in general, the cost of everything that was produced during the designated period in the country.

Calculating GDP is a complex process that economists do using special techniques. If you need to calculate GDP per capita, the resulting figure is divided by the number of residents of the state.

To determine the state of economic well-being of a country, there are a significant number of different criteria with the help of which the country’s macroeconomic indicators are compiled. There are also those that relate to psychological, social and others. But in this article, only those that indicate the level of economic prosperity are of interest, or rather, two of them: gross domestic product and gross national product. And the main question: what is the difference between GDP and GNP? In most countries of the world, these indicators do not differ much from each other. But there is a difference between them, and within the framework of the article it is necessary to find out how much the values ​​​​differ when calculating, why they are calculated and, finally, what is the meaning of these parameters, and what are these macroeconomic indicators in general.

What's happened

Gross domestic product refers to the total value of all produced material goods and services rendered that were provided and brought into a state of readiness for sale. Moreover, products made within the borders of a certain country are taken into account. This is the main difference between GDP and GNP. Counting is carried out in nominal banknotes. But conditions should be taken into account, because sometimes products can be included in GDP, and sometimes they cannot.

Example of calculating GDP

So, if there is a certain factory that produces semi-finished products and exports them abroad, then the total cost of semi-finished products produced by the enterprise will be added to the gross domestic product. But if the plant uses them in the future itself to manufacture more advanced and necessary products that will be exported, then the cost of the further product (the very final one, ready for external sales) will be added to the value of GDP. It should be said separately what real and nominal GDP/GNP are. The second means what is currently available, while the first means what it should be as a result of dividing GNP by the general price level. Quite confusing for a non-expert. The main difference that needs to be understood when studying GDP and GNP is the territorial aspect of the calculation.

What is gross national product

The gross national product is understood as the total value of material goods and services that were produced and provided by representatives of one people throughout the entire Earth. Compared to calculating gross domestic product, it is more labor-intensive and only gives a relative idea of ​​the standard of living. It’s all because of the use of money: for example, if a person moved to another country and started business there, GNP takes into account the income that he brings to the state, but this income is brought to a completely different person, from whom his homeland does not receive direct taxes and investments in the economy . A bypass effect is possible when money earned abroad is transferred to the homeland, but even this option is not optimal from the point of view of using human potential. How GDP differs from GNP should already be clear at this stage; if not, you need to read the previous two paragraphs.

How is GDP calculated?

Gross domestic product for a certain year is calculated in this way: the market value of all products produced by a country is summed up in a certain monetary value, which is ready for sale and use abroad by the enterprise that produced it. Here we should digress and talk about the so-called positive shadow sector of the economy. Calculating the real gross national product of a country is very problematic.

Positive shadow GDP

Usually you can learn from TV screens, newspaper pages, on the radio, and on the Internet that the shadow sector is always bad. But only illiterate people can say that. Let's give an example: you have a garden of ten acres, and it was planted with potatoes, carrots, radishes, herbs and other crops. Time has passed, the time has come to harvest. Vegetables collected from plots do not openly contribute to the gross domestic product, therefore, technically, this is part of the shadow sector of the economy - the production of products without imposing taxes. But it is grown, as a rule, for one’s own consumption; it does not harm society, but can only reduce the profits of individual entrepreneurs. It is situations like this that make up the positive shadow sector of the economy. Why was this told? The fact is that in different countries of the world there have been and, perhaps, there will be more attempts to determine the boundaries of this sector and add it to the gross domestic product (or gross national product), but so far, due to the impossibility of obtaining accurate data on the volume of work, such a calculation has not been possible is underway. Measurement of GDP and GNP is carried out in local currencies for “their” investors, and in US dollars for reporting data to international ones. Conversion is carried out at the official exchange rate.

How is GNP calculated?

The gross national product is calculated based on the data provided by people who have citizenship of a certain country, or, if there is a division into nations (provided for in passports), then on the basis of the income of representatives of one nation. This calculation technique is necessary to obtain information about the state of the state-forming masses as a reason for judging the state of affairs in the power itself.

Who calculates the gross domestic product?

GDP is calculated by two organizational forms: private and public. The tax and customs services and various statistics committees help the state collect the required information. The information they collect is quite accurate. But there are a number of pitfalls here that spoil government statistics. Among them: submission of false data by managers or owners of enterprises, deliberate falsification of data by the government or its subordinate structures. In world practice, it has been noted that owners of enterprises in capitalist countries have a tendency to reduce data, and increasing indicators is of interest to managers in countries with a significant public sector, such as in China, where scandals arise over and over again about enterprises overestimating their profitability and turnover indicators.

How do private structures count?

Private structures operate using other methods. They carry out calculations based on official data, but at the same time they check the data provided by other states on the amount of turnover, check with the data of banking institutions and other private structures that have access to the required type of information, and based on a comprehensive assessment they already make their own conclusions about the size of the gross domestic product and present their subjective judgments about the correspondence of government data to the real state of affairs. The calculation of GDP and GNP is carried out by them in order to provide additional confirmation of the financial capabilities of the power, as well as as an indicator of how trustworthy the country’s government can be from the point of view of a foreign investor.

Who calculates the gross national product?

GNP is calculated using almost the same methods as GDP, but the scale of action changes. Thus, if the gross domestic product is calculated for a certain territorial unit, then when calculating the gross national product it is necessary to take into account what is relevant to the people for whom the indicator is calculated.

The concepts of GDP and GNP are not very different for most countries, even when calculated by private entities. Although for some there are still differences, and they are huge. One of these states is Tajikistan, which receives 60% of its gross domestic product from the work of economic migrants. Thus, the gross national product of this country is a multiple of GDP.

Why is GDP calculated?

There are quite a few methods for calculating gross domestic product. Initially, the state wants to know the potential of the economy in order to be able to plan the further consistent development of the state formation. Also, a comparison of gross domestic product indicators allows you to view the progression and stability of its development. That is, data is provided by which potential investors will decide whether the country meets favorable indicators for them and whether it is worth investing in a project.

GDP is based on a number of other indicators that show the overall level of living comfort, a person’s ability to realize their talents, the level of social security and many other aspects of life. One such indicator is the Human Development Index. But even if things are going badly in a country, then calculating the gross domestic product has a certain meaning: it uniquely shows the level of openness in the country, and although in moments of decline it restrains investors’ investments and causes panic among them, when growth begins it can provoke those who invests money in assets that have reached the lower level of value, and, using the snowball principle, cause economic growth. GNP and GDP indicators are valuable precisely as indicators of a country’s level of development, indicators of possible potential that can be worked with and which can be developed, converting into profit.

Why is GNP calculated?

The main purpose, which should only be mentioned, is to find potential reserves. The fact is that migrants who have left the country and are conducting economic activities in the territory of another state can transfer money to their homeland. And ideally, having saved up some money, they can return home and start their own business, creating jobs and thereby revitalizing economic life. But the problem is that although they try to take everyone into account, a rather small number returns to their homeland, so it is impossible to consider the entire potential as usable. Typically, various models take into account rates from 20 to 80 percent. Data is used to identify groups of people who are most likely to return.

Gross Domestic Product (GDP)

Gross National Product is the total market value of all final goods and services produced in an economy (within a country) during one year.

Let's analyze each word of this definition:

• Cumulative. GDP is an aggregate indicator characterizing the total volume of production, total output.
• Market. The value of GDP includes only official market transactions, i.e. which have gone through the purchase and sale process and have been officially registered. Therefore, GNP does not include:

  a) self-employment (a person builds his own house, knits a sweater, renovates an apartment, a master repairs his own TV or car, a hairdresser does his own hair);

  b) free work (friendly assistance to a neighbor to fix a fence, to a friend to make repairs, to a friend to take him to the airport);

  c) the cost of goods and services produced by the “shadow economy”.

  Although the sale of illegally produced products is a market transaction, it is not officially registered or recorded by the tax authorities. The production volume of this “sector” of the economy in developed countries amounts to between a third and a half of total output. The shadow economy refers to those types of production and activities that are not officially registered and are not taken into account by national statistical and tax services. The shadow economy, therefore, includes not only illegal activities (drug trafficking, underground dens and gambling houses), but also completely legal types, the profits from which are, however, sheltered from taxes. To estimate the share of the shadow economy, there are no direct methods of calculation, and, as a rule, indirect methods are used, such as additional electricity consumption above that officially consumed and additional money supply (amount of money) in circulation above that required to service official transactions.

• Price. GDP measures total production in monetary terms, i.e. in value form, since otherwise it is impossible to combine apples with sheepskin coats, cars, computers, CD players, Pepsi-Cola, etc. Money serves as a meter for the value of all goods, allowing one to evaluate and compare the values ​​of all the various types of goods and services produced by the economy.
• Ultimate. All products produced by the economy are divided into final and intermediate. Final products are products that go into final consumption and are not intended for further industrial processing or resale. Intermediate products go into the further production process or resale. As a rule, intermediate products include raw materials, materials, semi-finished products, etc. However, depending on the method of use, the same product can be both an intermediate product and a final product. So, for example, meat bought by a housewife for borscht is a final product, since it went into final consumption, and meat bought by a McDonald's restaurant is an intermediate product, since it will be processed and put into a cheeseburger, which will be the final product in this case. product. All resales (sales of used items) are also not included in GDP, since their value has already been taken into account once when they were first purchased by the end consumer.

  GDP includes only the value of final products in order to avoid repeated (double) counting. The fact is that, for example, the cost of a car includes the cost of the iron from which steel is made; steel from which rolled products are produced; rolled metal from which the car is made. The cost of final products is therefore calculated based on added value. Let's look at this with an example. Suppose a farmer grew grain, sold it to a miller for $5, who ground the grain into flour. He sold the flour to a baker for $8, who made dough from the flour and baked bread. The baker sold the baked goods to a baker for $17, who sold the bread to a buyer for $25. Grain for the miller, flour for the baker, and baked goods for the baker are intermediate products, and the bread that the baker sold to the buyer is the final product.

  Table 1. Value added

  grain $5 $0 $5

  flour $8 $5 $3

  dough $17 $8 $9

  bread $25 $17 $8

  Total: $55 $30 $25

  The first column represents the cost of all sales (total revenue from sales of all economic agents), equal to $55 (total output). In the second - the cost of intermediate products ($30), and in the third - the sum of added values ​​($25). Thus, value added represents the net contribution of each producer (firm) to total production. The amount of added value ($25) is equal to the cost of the final product, i.e. the amount that the end consumer paid ($25). Therefore, in order to avoid repeated calculations, only value added equal to the value of final products is included in GNP. Value added is the difference between total sales revenue and the cost of intermediate products (that is, the cost of raw materials that each manufacturer (firm) buys from other firms). In our example: 55 – 30 = 25 ($). In this case, all internal costs of the company (for wages, depreciation, capital rental, etc.), as well as the company’s profit, are included in added value.

• Goods and services. Anything that is not a good or service is not included in GDP. Those payments that are not made in exchange for goods and services are not included in the value of GDP. Such payments include transfer payments and non-productive (financial) transactions. Transfer payments are divided into private and public and are like a gift. Private transfers include, first of all, payments made by parents to children; gifts that relatives give to each other, etc. Government transfers are payments that the government makes to households through the social security system and to firms in the form of subsidies. Transfers are not included in the value of GDP: 1) since transfers do not involve payment for either goods or services, i.e. As a result of this payment, there is no change in the value of GDP, i.e. nothing new is produced, and total income is only redistributed; 2) to avoid double counting, since transfer payments are included in household consumption expenditures (as part of their disposable income) and in firms' investment expenditures (as subsidies). Financial transactions include the purchase and sale of securities (stocks and bonds) on the stock market. Since there is also no payment for goods or services behind the security, these transactions do not change the value of GDP and are the result of a redistribution of funds between economic agents. (It should be borne in mind that the payment of income on securities is necessarily included in the value of GDP, since it is a payment for an economic resource, i.e. factor income, part of the national income).
• Produced in the economy (within the country). This statement is important in order to understand the difference between the Gross Domestic Product (GDP) and the Gross National Product (GNP). GNP is the total market value of all final goods and services produced by a country's citizens using what they own, i.e. national factors of production, no matter in the territory of a given country or in other countries. When determining GDP, the criterion is the factor of nationality. And GDP is the total market value of all final goods and services produced within a given country, whether using domestic or foreign factors of production. When determining GDP, the criterion is the territorial factor. In most developed countries, the difference between GDP and GNP does not exceed 1%. The difference between these indicators is significant for countries that receive high income from the services they provide to citizens of other countries (for example, tourism services - Cyprus, Greece, Malta, etc. - or banking services - Luxembourg, Switzerland).
• Within one year. In accordance with this condition, all goods produced in previous years, decades, eras are not taken into account when calculating GDP, since they have already been taken into account in the value of the GDP of the corresponding years. Therefore, to avoid double counting, only the value of a given year's output is included in GDP.

Ways to measure gross domestic product (GDP)

Three methods can be used to calculate GDP:

1. by cost (end-use method);
2. by income (distribution method);
3. by value added (production method).

The use of these methods gives the same result, since in economics total income is equal to the value of total expenses, and the value of added value is equal to the cost of the final product, while the value of the final product is nothing more than the sum of the expenses of final consumers on the purchase of the total product.

GDP "BY EXPENDITURE"

GDP, calculated by expenses, is the sum of the expenses of all macroeconomic agents, since in this case it is taken into account who acted as the final consumer of goods and services produced in the economy and who spent the funds on their purchase. When calculating GDP by expenditure, the following are summed up:

Household expenditures (consumer expenditures - C) + firm expenditures (investment expenditures - I) + government expenditures (government purchases of goods and services - G) + foreign sector expenditures (net export expenditures), denoted Xn (net exports)

Consumer spending (consumption spending – C) is the expenditure of households on the purchase of goods and services. They make up from 2/3 to 3/4 of total expenses, are the main component of total expenses and include: - expenses for current consumption, i.e. for the purchase of non-durable goods (these include goods that last less than one year, but it should be noted, however, that all clothing, regardless of the period of its actual use - 1 day or 5 years - refers to current consumption); - expenses on durable goods, i.e. goods that last more than one year (these include furniture, household appliances, cars, yachts, personal aircraft, etc., with the exception of expenses for the purchase of housing, which are considered not consumer, but investment expenses of households); - expenses for services (modern life cannot be imagined without the presence of a wide range of services, and the share of expenses for services in the total amount of consumer expenses is constantly increasing). Thus,

Consumer expenditure = household expenditure on current consumption + expenditure on durable goods (excluding household expenditure on housing) + expenditure on services

Investment expenses (investment spending - I) are the expenses of firms for the purchase of investment goods. Investment goods are understood as goods that increase the stock of capital. Investment costs include:

Investments in fixed capital, which consist of the costs of firms: a) for the purchase of equipment and b) for industrial construction (industrial buildings and structures);

Investments in housing construction (household expenditures on purchasing housing);

Investments in inventories (inventories include: a) stocks of raw materials and materials necessary to ensure the continuity of the production process; b) work in progress, which is associated with the technology of the production process; c) inventories of finished (produced by the company) but not yet sold products.

Investments in fixed assets and investments in housing construction constitute fixed investments. Investment in inventories represents the changing part of investment, and when calculating expenditures, GDP includes not the amount of inventories themselves, but the amount of changes in inventories that occurred during the year. If the stock of stocks increases, then GDP increases by a corresponding amount, since this means that additional investments were made in a given year that increased stocks. If the value of inventories has decreased, which means that in a given year the products produced and replenished in the previous year were sold, therefore, the GDP of that year should be reduced by the amount of the decrease in inventories. Thus, investment in inventories can be either positive or negative.

When calculating GDP by expenditure, investment is understood as gross domestic private investment. Gross investment (gross investment - Igross) is a total investment, including both restoration investments (depreciation - depreciation - A) and net investments (net investment - Inet): I gross = A + I net This division of investments is associated with features of the functioning of fixed capital. The fact is that in the process of its use, fixed capital wears out, is “consumed” and requires replacement, “restoration” of wear and tear. That part of the investment that goes to compensate for the wear and tear of fixed capital is called restoration investment or depreciation. In the system of national accounts they appear under the name “capital consumption allowances,” which can be translated as “the cost of consumed capital” or “consumption of fixed capital” in the economy. Thus, dividing investment into net investment and depreciation only applies to fixed assets. Investment in inventory is a pure investment.

Net investment is additional investment that increases the amount of capital of firms. The importance of net investment lies in the fact that they are the basis for the expansion of production and growth in output. If the economy has net investment I net > 0, i.e. gross investments exceed depreciation (recovery investments), I gross > A, this means that in each subsequent year the real volume of production will be higher than in the previous one. If gross investment is equal to depreciation I gross = A, i.e. I net = 0, then this is a situation of so-called “zero” growth, when the economy produces the same amount in each subsequent year as in the previous one. If net investment is negative I net

NET INVESTMENT = net investment in fixed assets + net investment in housing construction + investment in inventories

GROSS INVESTMENT = net investment + depreciation (cost of capital consumed)

Investment expenditures in the system of national accounts include only private investment, i.e. investments by private firms (private sector), and does not include government investments that are part of government procurement of goods and services.

It should also be kept in mind that this component of total expenditure only takes into account domestic investment, i.e. investments of resident firms in the economy of a given country. Foreign investment by resident firms and investment by foreign firms in the economy of a given country are included in the net export component of total expenditure. If net exports are negative, then this means that net foreign investment is negative. If net exports are positive, then net foreign investment is positive.

The third element of total expenditure is government procurement of goods and services (government spending - G), which includes:

Government consumption (expenses for the maintenance of government institutions and organizations that provide economic regulation, security and law and order, political administration, social and production infrastructure, as well as payment for services (salaries) of public sector employees);

Public investment (investment expenditures of state-owned enterprises)

It is necessary to distinguish between the concept of “government spending” and the concept of “government spending”. The latter concept also includes transfer payments and interest payments on government bonds, which, as already noted, are not taken into account in GDP, since they are neither a good nor a service, are not provided in exchange for goods and services, and are the result of a redistribution of total income.

Net exports The last element of total expenditure is net exports (net export – Xn). It represents the difference between export revenues (export – Ex) and import costs (import – Im) of the country and corresponds to the trade balance: Xn = Ex – Im.

GDP by expenditure = consumer spending (C) + gross investment spending (I gross) + government purchases (G) + net exports (Xn)

GDP "BY INCOME"

The second method of calculating GDP is the distribution method or the income method. In this case, GDP is considered as the sum of the incomes of the owners of economic resources (households), i.e. as the sum of factor income. Factor incomes are:

Wages and salaries of employees of private firms, representing income from the “labor” factor, i.e. payment for labor services and includes all forms of remuneration for labor, including basic wages, bonuses, all types of material incentives, overtime pay, etc. (salaries of civil servants are not included in this indicator, since they are paid from the state budget (budget revenues) and are part of government procurement, and not factor income);

Rent or rent (rental payments) - income from the “land” factor and includes payments received by owners of real estate (land, residential and non-residential premises) (at the same time, if the homeowner does not rent out the premises he owns, then in the system national accounts, when calculating by income, GNP takes into account the income that this landlord could receive if he provided these premises for rent; such imputed income is called “imputed rent” and is included in the total amount of rental payments;

Interest payments or interest (percent payments), which are income from capital, payment for the use of capital used in the production process (therefore, the amount of interest payments includes interest paid on the bonds of private firms, but does not include interest paid on government bonds (the so-called “service of public debt”), since government bonds are issued not for production purposes, but for the purpose of financing the state budget deficit);

Profit, i.e. income from the “entrepreneurial ability” factor. In the system of national accounts, profit is divided into two parts in accordance with the organizational and legal form of enterprises:

Profit of the non-corporate sector of the economy, including sole proprietorships and partnerships (this type of profit is called “proprietors’ income”);

Profit of the corporate sector of the economy based on the shareholder form of ownership (share capital) (this type of profit is called “corporate profit.” Corporate profit is divided into three parts: 1) corporate income tax (paid to the state); 2) dividends (distributed portion of profits) that the corporation pays to shareholders; 3) retained earnings of corporations, remaining after the company’s settlements with the state and shareholders and serving as one of the internal sources of financing net investment, which is the basis for the corporation for the expansion of production, and for the economy as a whole - economic growth.

In addition to factor income, GDP calculated by the income flow method includes two elements that are not the income of the owners of economic resources.

The first such element is indirect taxes on business. A tax is a forced payment by a household or firm of a certain amount of money to the government not in exchange for goods and services. Taxes are divided into direct and indirect. Direct taxes include taxes on income, inheritance, and property. The taxpayer and the taxpayer are one and the same economic agent. Indirect taxes are part of the price of a product or service. The peculiarity of indirect taxes is that they are paid by the buyer of a product or service, and the company that produced them pays the state. Thus, the taxpayer and the taxpayer in this case are different economic agents. Since GDP is a cost indicator, then, like the price of any product, it includes indirect taxes, which must be added to the amount of factor income when calculating GDP. Although taxes are state income, they are not included in the amount of factor income, since the state, being a macroeconomic agent, is not the owner of economic resources.

Another element that should be taken into account (added) when calculating GDP by income is depreciation, since it is also included in the price of any product. So,

GDP by income = wages + rent (including imputed rent) + interest payments + owner income + corporate profits + indirect taxes + depreciation

GDP "BY VALUE ADDED"

The third method of calculating GDP is the summation of added values ​​for all industries and types of production in the economy (value added calculation method). For example, the American economy is divided into 7 large sectors, such as industry, agriculture, construction, services, etc. For each sector, added value is calculated and then summed up.

Obviously, the value of GDP calculated by different methods should be the same (the difference can only be at the level of statistical errors). Theoretically, this conclusion follows from the fact that the sum of the values ​​added by each firm (at each stage of production) is equal to the cost of the final product. On the other hand, value added is the difference between the firm's revenue and the costs of purchasing the products of other firms, therefore, it is equal to the firm's net income. All this is clearly visible in the diagram corresponding to Diagram 1 (definition of added value)

The bread was sold to the buyer for $25 (the cost of the final product is $25), the agents' income was: farmer $5 + miller $3 ($8 - $5) + baker $9 ($17 - $8) + baker $8 ($25 - $17) = $25, added value is : $5 from the farmer + $3 from the miller + $9 from the baker + $8 from the baker = $25. Thus, all calculation methods gave the same result - $25.

Gross domestic product (GDP) is one of the most important indicators of the system of national accounts, which characterizes the final result of the production activities of resident economic units and measures the value of goods and services produced by these units for final use.

GDP is a measure of output produced, which represents the value of final goods and services produced. This means that the cost of intermediate goods and services used in the production process (such as raw materials, supplies, fuel, energy, seeds, feed, freight transport services, wholesale trade, commercial and financial services, etc.) is not included in GDP. Otherwise, GDP would contain a duplicate count.

Additionally, GDP is a domestic product because it is produced by residents. Residents include all economic units (enterprises and households), regardless of their nationality and citizenship, that have a center of economic interest in the economic territory of a given country. This means that they are engaged in production activities or live in the economic territory of the country for a long time (at least a year).

The economic territory of a country is the territory administratively controlled by the government of a given country, within which persons, goods and money can move freely. Unlike geographical territory, it does not include territorial enclaves of other countries (embassies, military bases, etc.), but includes such enclaves of a given country located on the territory of other countries.

And finally, GDP is gross product because it is calculated by subtracting the consumption of fixed capital. Consumption of fixed capital represents a decrease in the value of fixed capital during the reporting period as a result of its physical and moral wear and tear and accidental damage that is not catastrophic in nature.

In theory, domestic product should be determined on a net basis, i.e. minus consumption of fixed capital. However, to determine the consumption of fixed capital in accordance with the principles of the system of national accounts, special calculations are required based on data on the replacement cost of fixed assets, their service life and depreciation by type of fixed assets. Accounting depreciation is not suitable for this purpose. Not all countries make such calculations, and those that do use different methods. Thus, GDP data is more accessible and comparable between countries, and therefore GDP has become more widely used than net domestic product.

Methods for calculating GDP

GDP can be calculated using the following three methods:

1. as the sum of gross value added (production method);
2. as the sum of the end-use components (end-use method);
3. as the amount of primary income (distribution method).

When calculated by the production method, GDP is calculated by summing the gross value added of all resident production units, grouped by industry or sector. Gross value added is the difference between the value of goods and services produced (output) and the value of goods and services consumed entirely in the production process (intermediate consumption).

According to the final use method, GDP is defined as the sum of the following components: expenditures on final consumption of goods and services, gross capital formation, balance of exports and imports of goods and services.

When determining GDP using the distribution method, it includes the following types of primary income paid by resident production units: wages, net taxes on production and imports (taxes on production and imports minus subsidies on production and imports), gross profit and gross mixed income.

According to the Keynesian model of economic development, GDP in the simplest case is presented as the sum of 4 main components - the volume of consumption (C, from Consumption), the volume of investment (I, from Investments), government spending (S, from Goverment spending), and net exports, i.e. full export minus full import (E-M, from Export - iMport):

GDP = C + I + S + (E - M)

The structure of consumption (C) usually distinguishes 3 subclasses: consumption of durable goods (more than 3 years) (durable goods - cars, furniture, etc.), short-term (less than 3 years) use (nondurable goods - clothing, food, medicines, etc.) d.) and services.

For example, in the USA, in percentage terms, durable goods account for about 15% of total consumption, nondurables - about 31%, and services - about 54%. Overall, C currently accounts for about 56% of US GDP and is thus its most important component.

Investments (I) are responsible for approximately 14% of GDP, government expenses (S) - social payments, weapons, interest on government bonds, etc. - for 17%, and finally export (E - M) - for about 13%. Note that for the United States, it would be more logical to call the last component of GDP net imports, since this country imports incomparably more goods and services than it exports (i.e., the E - M value is negative).

GDP per capita

No less important and, at the same time, more fully reflecting the standard of living in a particular country in the world compared to GDP is the Gross Domestic Product indicator calculated per capita. This indicator is calculated as the ratio of GDP to the population of the country and shows how much gross product produced in the country per year and expressed in value terms per 1 resident of a given country. This indicator is used, first of all, to determine the standard of living of the population in a particular state.

GDP per capita in the world's 100 largest countries in 2005

Data for 2014 can be viewed