GDPGross 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

• 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•

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GDP- The Expenditure Approach

• "C + I + G+ (x-im) = GDP. • 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.