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- Gross_domestic_product abstract "Gross domestic product (GDP) is a monetary measure of the value of all final goods and services produced in a period (quarterly or yearly). Nominal GDP estimates are commonly used to determine the economic performance of a whole country or region, and to make international comparisons. Nominal GDP, however, does not reflect differences in the cost of living and the inflation rates of the countries; therefore using a GDP PPP per capita basis is arguably more useful when comparing differences in living standards between nations.GDP is not a complete measure of economic activity. It accounts for final output or value added at each stage of production, but not total output or total sales along the entire production process. It deliberately leaves out business-to-business (B2B) transactions in the early and intermediate stages of production, as well as sales of used goods. In the United States, the Bureau of Economic Analysis (BEA) has introduced a new quarterly statistic called gross output (GO), a broader measure that attempts to add up total sales or revenues at all stages of production. Mark Skousen was the first economist to advocate GO as an important macroeconomic tool. Other countries are following suit, such as the United Kingdom, which now produces an annual statistic called Total Output.GDP attempts to measure the “use” economy, i.e., the value of finished goods and services ready to be used by consumers, business and government. GDP is similar to the “bottom line” (earnings) of an accounting statement, which determined the “value added” or the value of final use. GO is an estimate of the “make” economy, i.e., the monetary value of sales at all stages of production. Thus, GO is similar to the “top line” (revenues or sales) of an accounting statement. GDP and GO are not mutually exclusive, but are complementary ways of examining the state of an economy.As Dale Jorgenson, Steve Landefeld, and William Nordhaus conclude in “Gross output [GO] is the natural measure of the production sector, while net output [GDP] is appropriate as a measure of welfare. Both are required in a complete system of accounts.” The largest GDP's by continent are: the United States in the Americas, Germany in Europe, Nigeria in Africa, China in Asia and Australia in Oceania.".
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