Prescriptive and policy. Gross domestic product GDP is a monetary measure of the market value [ 1 ] of all the final goods and services produced and rendered in a specific time period by a country [ 2 ] or countries.
The ratio of GDP to the total population of the region is the GDP per capita and can approximate a concept of a standard of living. Nominal GDP does not reflect differences in the cost of living and the inflation rates of the countries; therefore, using a basis of GDP per capita at purchasing power parity PPP may be more useful when comparing living standards between nations, while nominal GDP is more useful comparing national economies on the international market.
GDP is often used as a metric for international comparisons as well as a broad measure of economic progress. It is often considered to be the world's most powerful statistical indicator of national development and progress. However, critics of the growth imperative often argue that GDP measures were never intended to measure progress, and leave out key other externalities , such as resource extraction , environmental impact and unpaid domestic work.
William Petty came up with a concept of GDP, to calculate the tax burden , and argue landlords were unfairly taxed during warfare between the Dutch and the English between and Congress report, where he warned against its use as a measure of welfare see below under limitations and criticisms. Department of Commerce under Milton Gilbert where ideas from Kuznets were embedded into institutions. The history of the concept of GDP should be distinguished from the history of changes in many ways of estimating it.
The value added by firms is relatively easy to calculate from their accounts, but the value added by the public sector , by financial industries, and by intangible asset creation is more complex.
