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Gross Domestic Product
by ErinSolaro
In This Entry
Definitionof GrossDomesticProduct
Brief Historyof GDP
Limitationsof GDP
What GDP Countsand What It DoesNot
AlternativestoGDP
Bibliography
Definition of Gross Domestic Product
Virtuallyall nationsmaintain National Income andProductAccounts(NIPA).Representativecategories
for income include employee wagesandinterestpayments,while representativecategoriesforproducts
include governmentordersandconsumeranddurable goods.Statisticiansandeconomiststhen
aggregate,or sumup and total these accounts,toproduce a varietyof economicindicators.One of the
mostimportantof these indicators,andone of the mostpublicizedandpoliticallysignificant,isthe
Gross DomesticProduct.
The Gross DomesticProduct(GDP) is the primarymeasure of a nation’sproduction.InAugust1991, the
world’slargesteconomy,the UnitedStates,shiftedfromusingGrossNational Product(GNP) toGross
DomesticProductas the leadingmeasure of itsproduction.According tothe U.S. Bureauof Economic
Analysis,the GDPisthe accumulatedtotal of goodsand servicesproducedinasingle yearbyworkers
and plantsor variousotherformsof productive propertylocatedinaparticularcountry,forexample,
the UnitedStates. Thisistrue whetherthe workersandthe propertyownersare citizensorforeign
residentsof the nationinwhichtheyare located.Incontrast,Gross National Productisdefinedasthe
annual total of goodsand servicesproducedeitherbythe residentsor productive propertyownedby
the residentsof anation,whetherthose workersandthatpropertyare locatedinthat particularnation
or outside itsborders. (Surveyof CurrentBusiness,1991).
Brief History of GDP
SimonKuznets,aneconomistatthe National Bureauof EconomicResearch,createdthe original formula
for the Gross DomesticProductin1937 (KuznetswaslaterawardedaNobel Prize forhiseconomicwork,
particularlyforthe National Income andProductAccounts) (Dickinson,2011).Kuznets’workwasdriven
not byabstract intellectual curiositybutbya real and pressingneed.
Duringthe Great Depressionof the 1930s, the Hooverand Rooseveltadministrationssimplydidnot
have access to comprehensivestatisticsonthe UnitedStates’national income andproduction.Instead,
policymakershadto cobble togetherapicture of the U.S. economyandthe devastationthatithad
sufferedbyrelyingondisconnectedinformationsuchasstock prices andfreightcar loads.Without
comprehensive data,acomprehensive responsetothe collapse of amature industrial economywas
nearlyimpossible.Kuznetsandhisteamworkedfroma varietyof sourcesthat,exceptforU.S. Internal
Revenue Service tax data, were usuallynotcomprehensive,aswell assurveyscommissionedtofill the
gap. Aftertwoyearsof researchand analysis,theywere able tocompileindustry-specificestimatesthat
approximatedthe UnitedStates’“national income.”Asincompleteasthese estimateswere,theywere
still animportantfoundationforPresidentRoosevelt’sApril 1938 “Message to CongressonStimulating
Recovery”(Landefeld,Seskin,&Fraumeni,2008; Roosevelt,1938).
From MeasuringIncometo MeasuringProduction
Income, however,isnotproduction.Asthe UnitedStatesmovedclosertodirectinvolvementinWorld
War II,itbecame veryclearthat the governmentneededtoknow whatthe nationwasproducing,both
at home and abroad,so it couldadequatelyplanfuturecivilian andmilitaryproduction.Thus,indirect
estimatesof final salesof goods,“whichwouldexclude the value of intermediate productsandwould
equal incomesearnedbythe factorsof production”froma varietyof sources,suchas durable goods,
consumergoods,andmilitaryorders,graduallybecamethe foundationof the GrossNational Product
(Landefeld,etal.,2008, p.195)
DuringWorldWar II andfor some decadesafterwards,GrossNational Product,notGrossDomestic
Product,became the chief meansof measuringU.S.economicproduction.One significantreasonforthis
was thatfrom before the UnitedStatesenteredWorldWarI until well afterWorldWarII, the United
Statesacquiredsignificantindustrial resourcesoutside itsborders.Some of thiswasBritishproperty,
soldto pay forfoodand war materiel,while somewasconfiscatedenemyproperty.Thisacquisitionof
productive property,coupledwiththe devastationof WorldWar II,meantthat the UnitedStateshad a
verylarge exporteconomythatproduced a greatdeal outside itsborders.
By 1991, several generations’worthof economicrebuildingandreconstruction,particularlyinAsia,had
transformedthe global economy,andalongwithitthe U.S.economy.The resultwasthat1975 wasthe
lastyear the UnitedStatesran a trade surplus (Hawkins,2002).Many of those importedgoodscame
fromAsia,fromJapan,Taiwan (the Republicof China),SouthKorea,andthen(mainland) China(the
People’sRepublicof China).The U.S.shiftfromGrossNational ProducttoGross DomesticProductas its
leadingmeasure of productioninAugust1991 reflectedthesesignificantchanges.
Whenthe UnitedStatesadoptedGDP as itsleadingmeasure of production,ittacitlyacknowledgedthat
itsrole as the world’spremierexporterhadended.MostothercountrieshadalreadyadoptedGDPas
the leadingmeasure of theirproductionpreciselybecause GDPreflectedthe disparitybetweenwhat
was producedwithintheirbordersandwhatwasusedwithintheir bordersbutwasproducedoutside
them.Measuringthe U.S. economybyGDP meantthat itcouldalsonow be compareddirectlytomost
of the world’sothereconomies.
However,inAugust1991, the difference betweenthe UnitedStates’GNPandGDPwas statisticallyvery
small.The U.S. GNPwas US$5465.1 billionversusaGDP of US$5423.4 billion (Surveyof Current
Business,1991).This verysmall discrepancybetweenGNPandGDP was nottrue formany countriesin
1990, andby 2012, ithad ceasedto be true forthe UnitedStatesas well.In2012, the UnitedStatesGDP
was US$14.660 trillion,withatrade deficitof goodsandservicesworthUS$516 billion (UnitedStates
CensusBureau). However,itisnecessarytobearinmindthat GDP doesnot reflectemploymentand
unemploymentstatistics.
In August1991, the U.S. Bureau of EconomicAnalysisplannedtocontinue publishingGNPfiguresona
regularbasis,officiallystatingthatGDP “wasthe appropriate measure formuchof the short-term
monitoringandanalysisof the U.S.economy”preciselybecause “GDPreferstoproductiontakingplace
inthe UnitedStates”(Surveyof CurrentBusiness,1991).By 2008, neitherGrossNational Productnorits
acronymGNP existsin THE SYSTEM OF NATIONAL ACCOUNTS 2008. A textsearch of the pdf doesnotlocate
a single reference toGNP,noris GNPan entryin the glossary.The U.S. transitionfromGNPto GDP as
the aggregate statistical measurementof U.S.productionreflectedincreasingforeignownershipof the
meansof productioninside itsborders.Bythe same standard,the absence of GNPfrom THE SYSTEM OF
NATIONAL ACCOUNTS 2008 reflectsthe realityof the currentglobal economy,whichisthatmanynations
have a significantdisparitybetweenwhattheirnationalsproduce,inoroutside theirborders,andwhat
othernationalsproduce insidetheirborders.
How GDP Is Calculated
THE SYSTEM OF NATIONAL ACCOUNTS 2008 “isa statistical frameworkthatprovidesacomprehensive,
consistentandflexible setof macroeconomicaccountsforpolicymaking,analysisandresearch
purposes”(Inter-SecretariatWorkingGrouponNational Accounts,2012, p. iii).
Knownas 2008 SNA, The Systemof NationalAccounts2008 was compiledbythe Inter-Secretariat
WorkingGroup onNational Accounts(ISWGNA).Economists,researchers,andstatisticiansfromthe
EuropeanCommunity,the InternationalMonetaryFund,the OrganisationforEconomicCo-operation
and Development,the UnitedNationsandthe WorldBankworkedwithcentral bureausof statisticsand
central banksaroundthe worldtoproduce 2008 SNA. Nationsare encouragedtofollow the guidelines
in2008 SNA whentheycompile theirnational accounts,of whichGDPisone of the most important
aggregate figures.
While 2008 SNA ismeantto serve as a guide forall the national accountsof all countries,italsoallows
for local variations.Some countrieswill findsome itemsof onlylimitedinterest,if notcompletely
irrelevant.The 2008 SNA alsorecognizesthattablespreparedforpublicrelease will notbe asdetailed
as the accounts themselves.The goal of 2008 SNA isnot onlyto adequatelyreflectthe income and
productionof moderneconomies,butalsotohelpcreate a recognizablystandardcomparisonamong
countriesdespitetheirdifferences.The largergoal istoallow observers,analysts,andpolicymakersnot
merelytocompile GDPandother aggregates,butalsotounderstandhow economicsectorsinteract.
(Inter-SecretariatWorkingGrouponNational Accounts,2012, pp.iii,xlvii,1)
MethodsofCalculatingGDP
The 2008 SNA establishesthree standardwaysof calculatingGDP (Inter-SecretariatWorkingGroupon
National Accounts,2012, pp. 332–333). Accordingto the 2008 SNA, the firstis the production
approach.This meansthatGDP is the final output,minusthe value of intermediate consumption.
For example,asheepfarmerwill provide figuresonthe value the sheephave produced,notthe value of
theirdressedmeat,theirtannedhides, andtheirspunfiber.The farmerwill alsonotinclude the costof
the veterinarycare andfeedamendmentsprovidedtothe sheep.(Thisavoidsdoublecountingbecause
the shearer,the butcher,the tanner,the veterinarian,andthe feedstore willproduce theirownfigures
for theirproduction.) Tothatfigure,statisticiansaddtaxesandsubtractthe value of subsidiesonthe
productif those subsidieshave notbeenpreviouslypaidtothe producer.
The secondapproach isthe expendituremodel.Statisticianscalculate the consumptionof all final goods
and servicesbyeveryhouseholdinanation.To thissum, statisticiansaddgrosscapital formation,which
isa nation’sinvestment,minusitsdisposal of assetstoassistincapital formationorproduce inventories
of goodsor valuables.Examplescanbe factories,machinery,orcomputersoftware.Alsoaddedwould
be governmentexpendituresof all sortsongoodsand services,suchasuniforms,orinvestmentin
researchand development.Finally,the value of the nation’sexportsisadded,andthe value of the
nation’simportssubtracted.
The third approachis the income model.A nation’sGDPisequal tothe sum of the nation’semployees’
total compensation.Tothis,statisticiansaddthe nation’sgrossoperating surplus,which 2008 SNA
definesasthe “contributionof capital toproduction” (Inter-SecretariatWorkingGrouponNational
Accounts,2012, p. 418) and mixedincome suchasinterestpaymentsandtaxes.Fromthissubtotal,they
subtract anysubsidiesoneitherproductionorimports.
In theory,these three methodsshouldproduce the same resultsforthe same nationduringthe same
time periods.Inreality,however,oftenthese methodsproduce differentresults,if onlybecause of slight
differencesinrounding.These methodsalsouse differentsourcesanddifferentestimationmethods,
none of whichare perfect (Landefeldetal.,2008, p. 210).
CollectingStatistics
The followingexplanationof howa nation’sGDPisestimatedisbasedonthe UnitedStates’methods.
Othernationswill use slightly(orvery) differentmodels,andtheirstatisticsmaybe more orlessreadily
available.Forexample,GreatBritainusesestimatesfromall three methodsof calculatingGDPto
produce a single GDPestimate. (Topicguide to:NationalIncome,ExpenditureandOutput:Overview
Tab) The readershouldalsobe cautionedthatnonation,anywhere,nomatterhow transparentits
culture,tellsthe truth,the whole truth,andnothingbutthe truthabout itseconomy.Thisisparticularly
but notentirelylimitedtosuchobviouslysensitiveissuesasdefense,intelligence,andresearchand
developmentexpenditures.Readersinterestedinunderstandingtheirnation’sGDPandthe waythat
GDP is calculatedshouldconsultthe websiteof theirgovernmentagencywithresponsibilityfor
estimatingandcompilingthese estimates,suchasthe Central Bureauof Statistics.
The processoutlinedbelowisagrosslysimplified,theoretical glossof anauthoritative accountof a
single nation’sestimatingprocedurethatwasneverthelessitself simplified. (Source throughoutthis
section,unlessotherwise noted,isLandefeldetal.,2008, pp.196–199).
An agencyof a national government,suchasthe Bureauof Economic Analysisof the Central Bureauof
Statistics,estimatesthe national GDPaccordingtothe expendituresmodel.(The mathematical formula
for the expendituresmodel is:C+ I + G + (X - M), withC= Consumption,I=investment,G= government
expenditures,X = exportsandM = imports.)
Every five years,inyearsendingin2 and 7, thisBureauof EconomicAnalysisconductsaneconomic
censusof “virtuallyall”the businesseslocatedinthe nationthatpaytheiremployees.The Bureauthen
analyzesthe data,supplementingitwithstudiesandsurveyswhennecessary,thenadjustingthe figures,
to formthe basisof the nominal GDPfor what isknownas a benchmarkyear.For large economies,this
processcan take several years.The resultingestimate isknownasthe nominal GDP,whichisthen
deflated,oradjustedforinflation.
These GDP andother NIPA estimatesare thenpresentedin“chained”currencies:forexample,the U.S.
GDP estimatesare currentlypresentedinchained2005 dollars.Inthe wordsof the U.S.Bureau of
EconomicAnalysis,“chain-type estimatesprovide the bestavailablemethodforcomparingthe level of a
givenseriesattwopointsintime.Chained-dollarestimatesare obtainedbymultiplyingthe chain-type
quantityindex foranaggregate byits value incurrentdollarsinthe reference year[2005] and dividing
by 100” (NIPA TablesHelp).The resultof thisanalysisisaGDP estimate thatreflectsthe nation’scurrent
abilitytocollecteconomicdataandorganize itaccordingto national priorities.Forexample,in1999, the
UnitedStatesbeganrecognizinginvestmentincomputersoftware asafixedinvestment.Anynationwill
have similarexamplesof itsown.
Like populationcensuses,economiccensusesare treasure trovesof data.However,evenif acountry
choosestoconduct economiccensuses,theyonlyoccureveryseveral years.The benchmarkGDP
estimatestheyenable lagbyseveral yearsbecause itrequirestimeandefforttoanalyze sucha large
trove of data.Thus a nation’sCentral Bureauof Statistics mayalsoestimate the GDPon an annual and
quarterlybasisbysamplingfirmsthatreporttoit. Typically,responsestoformal census,whether
populationoreconomic,are mandatory,butrespondingtoannual orquarterlysurveysmaybe
voluntary,depending ona nation’spolicies.Foranideaof scale,as of 2008, the annual U.S. sample size
has beenabout150,000 respondents,andthe quarterlyabout35,000; inthe UnitedStates,response to
the formerismandatoryand to the latter,voluntary.(Incomparison,the U.S.benchmark,oreconomic
census,sample hasmore than7 millionrespondents.)
In mature economieswithanaccomplishedcivilservice,quarterlyestimatescanappearinthree phases.
These estimatesmightbe baseduponmonthlysurveydataprovidedbyrespondents,augmentedby
extrapolationsbythe Bureauof EconomicAnalysis.AnAdvancedQuarterlyEstimate of GDPwouldbe
issuedaboutone monthafterthe quarterended.Approximatelyone monthafterthe Advanced
QuarterlyEstimate,ortwomonthsafterthe quarter ended,additional andrevisedsurveydatawouldbe
incorporatedintothe PreliminaryQuarterlyEstimate.Three monthsafterthe endof the quarter,the
Final QuarterlyEstimate ispublished.Thenthe Bureauof EconomicAnalysismaychoose tore-examines
itsGDP estimatesforthatcalendaryearanda setperiodof precedingyearsinordertoadjustitsGDP
estimatesbasedonanynewinformation,suchasfromannual surveys,industrysurveys,andother
sourcesof information,includingthe nation’stax authorities.
Limitations of GDP
GDP reflectsonlythatwhichcan be counted.If “it” cannotbe counted,orif a nation’spolicymakersdo
not want“it” counted,“it”will notbe reflectedinGDP,nomatterhow important“it”is inthe real life of
a nation.
Gross DomesticProductisthe most importantaggregate of the National Income andProductsAccounts,
at leastintermsof publicuse.Alongwithunemploymentfigures,the GDPisthe single statistic
politiciansare mostlikelytopointtowhen theywishtosay,“Look, the economyisgrowing!We’re
booming!”or“Look, the economyisshrinking!We’re inrecession!”Certainly,if youunderstandGDPas
an aggregate figure andare willingtotake some time diggingintothe NIPAsthatproduce it,you can
learna great deal aboutan economy.Youcan learnhow much of itsproductionisagricultural,how
much industrial,howmuchisservices.Youcan alsoascertainwhattypesof goodsare beingproduced,
whatsectors produce what,andduringwhat timeframe.
However,since Kuznetsandhisteambeganthe workthat createdthe conceptof GDP, economistshave
recognizedthatwhile GDPreflectsimportantinformationaboutaneconomy,itisaninadequate
reflectionof the totalityof economies.GDPpoorlyreflectsthe economicrealitiesof the livesof the
humanbeingsinthe economy.Kuznetsstatedthisexplicitlyin1934, as he wrote in hisveryfirstreport
to Congress,“The welfare of anationcan, therefore,scarcelybe inferredfromameasure of national
income”(Rothkopf,2011). Kuznetsandhisteam of economistsknew whentheyreleasedtheir
statistical workthattheywere dealingwithnumbers,andnumbersonlyreflectthingsthatcan easilybe
counted.Thisisthe fundamental limitationof economics:If itcannotbe countedorif itis notsocially
valuedenoughtobe counted,itdoesnotexist.
What GDP Counts and What It Does Not
GDP counts onlythe goodsandservicesproducedwithinacountry,notthose of that country’s
“competitors.”
GDP doesnot reflectthe identityof the ownersof the meansof production.Are theyindividual citizens
or cooperatives,smalllocal companies,large multinationals?The statisticissilent.
GDP doesnot reflectthe identityof the producers. Are theycitizens,legal aliens,illegal immigrants
desperate forabetterlife,robots?
GDP doesnot reflectthe payandtreatmentof workers.Itdoesnot reflectunemploymentand
underemploymentfiguresandwhatthe opportunitycosttosocietyisof theirlostintelligence,ambition,
energyandtalent,creativity,andcontributions.
GDP doesnot reflectaverage nationalincome,aneconomicindicatorof itsown.Itdoesnot reflectthe
distributionof income andaccumulatedwealth,eventhoughhighdegreesof inequalitycarrysignificant
economiccosts.
GDP doesnot reflectwhatismade bya society’sworkers,orhow well itismade.Certaincountrieshave
a reputationfordesignandcraftsmanship,while othercountriesdonot.GDPdoesnot representthe
humancost of shoddygoods,asopposedtothe humansatisfactionof the well-made.
By the same standard,GDP doesnot mentionwhatacountry isactuallyimporting.Isitimportingluxury
goods,high-tech,ormachine tools?If anationisimportingdurable goods,isitdoingsobecause itno
longermanufacturesthese itself,orisitinthe processof creatingitsown manufacturingbase?Doesits
foreigntrade balance forseveral years,ordoesitrun deficitsorsurplusesyearafteryear?
GDP doesnot count the downstreamcostsof imports,especiallywhennationsrunhightrade deficits
yearafter year.It doesnotanswerthe questions,if anationhada policyof runninga trade balance,
bothin termsof costs and technology,wouldithave ahigherGDP, lessunemployment,alargerand
deepermanufacturingsector?
GDP doesnot include environmentaldamage done toacountry byits industrial,agricultural,andsocial
policies.
GDP doesnot countunpaidlabor,evenwhenitisabsolutelyvital tosociety,evenwhen,if itisnotdone
well,forwhateverreasons,the economicdimensionsof the humancostcan be veryhigh.Raising
childrenandcaringfor the elderlyare twoobviousexamples.The economistMarilynWaringfirst
formulatedthiscritiquewiththe 1988 publicationof herbook COUNTING FOR NOTHING: WHAT MEN
VALUE AND WHAT WOMEN ARE WORTH, a critique thenconsideredmarginal,butnow becoming
mainstream.
GDP doesnot include personalproductionthatisnevermeanttobe soldonthe formal market,whether
it isfor home use or barter.Thiscottage productioncanrange from unskilledandundistinguished
productsto workthat is betterthansimilaritemsproducedbyanyone buta veryfew mastercraftersin
specializedworkshops.Therefore,notonlycanthe productionnotbe seen,buta range of valuescannot
be assignedtoit because itnevercomesonthe market.
GDP doesnot include the undergroundeconomy:legitimateworkof all sortsthat ispaidfor incash, as
well asthe salesof humanbeings,drugs,andstolenproperty.The firstrobsnotonlythe state of tax
revenue,butalsoall the people wholive inthatstate,all of whomuse the wide varietyof social services
and governmentprogramsthose taxesfund.The secondimposeshorrendouscostsonsocietyby
eliminatingafloorunderneathhumanbeings,below whichnohumanbeinginthe nationcanbe
treated.
To get an accurate depictionof the real healthof anynation’seconomy,individualshave toaskthese
questionsandothers.The wise investorcannotrelyona single statistic,norcan the wise citizen.The
answersalwaysdependuponthe questionsasked.
Alternatives to GDP
Finally,GDPdoesnotreflectqualityof life orhappiness,eitherpersonal orsocial.There iswidespread
recognitionamongseriouseconomistsandpolicymakersaboutthe limitationsof GDP.Meanwhile,there
are nascentalternatives,suchasthe U.N. HumanDevelopmentIndexandthe EuropeanUnion-
sponsoredCommissiononthe Measurementof EconomicPerformance andSocial Progress.In2004,
Chinabeganto developaGreenGDP program, an attemptto calculate the economiccostsof pollution.
That initiativewassuppressedin2007, but by early2012, there were indicationsinthe Chinesepress
that itwas beingresurrected (Lelyveld,2012).As of 2012, however,nosingle alternative statisticwas
widelyusedtoconveythe totalityof anation’seconomicperformance the wayGDPis.
The followingtable isarankorder of the top 10 nationsor national regionsbyGDP,GDP percapita, Life
Expectancyat Birth,and theirU.N.Human Developmentrankingsasof September2012. It can be
readilyseenthatwhile GDPisimportant,itisalsonotthe totalityof a nation’seconomyandthe impact
of thateconomyuponhumanlives.
GDP (UnitedStates
Central Intelligence
Agency)
GDP per Capita
(UnitedStatesCentral
IntelligenceAgency)
Life Expectancy at
Birth (UnitedStates
Central Intelligence
Agency,2012)
UN Human
DevelopmentIndex
(InternationalHuman
Development
Indicators,2011)
EuropeanUnion Liechtenstein Monaco Norway
UnitedStates Qatar Macau Australia
China Luxembourg Japan Netherlands
India Bermuda Singapore UnitedStates
Japan Singapore San Marino New Zealand
Germany Jersey Andorra Canada
Russia FalklandIsles/
IslasMalvinas
Guernsey Ireland
Brazil Norway Hong Kong Liechtenstein
UnitedKingdom Brunei Australia Germany
France Hong Kong Italy Sweden
Bibliography
Dickinson,E.(2011, January/February). GDP:a Brief History: OneStat to Rule ThemAll. Retrievedfrom
ForeignPolicy: http://www.foreignpolicy.com/articles/2011/01/02/gdp_a_brief_history
Hawkins,W.R. (2002, December18). USTrade RepresentativeCelebrates40 Years of Failure. Retrieved
fromAmericanEconomicAlert.org:
http://americaneconomicalert.org/view_art.asp?Prod_ID=713
InternationalHuman DevelopmentIndicators.(2011,November2).RetrievedfromUnitedNations
Human DevelopmentReports:http://hdr.undp.org/en/statistics/
Lelyveld,M.(2012, 02 13). China's'Green GDP' Resurfaces.RetrievedfromRadioFree Asia:
http://www.rfa.org/english/energy_watch/greengdp-02132012120520.html
NIPA TablesHelp. (n.d.).RetrievedfromBureauof EconomicAnalysis:
http://www.bea.gov/national/nipaweb/NIPAHelp.htm
Rothkopf,D.J. (2011, October8). Redefining theMeaning of No.1. RetrievedfromThe New YorkTimes:
http://www.nytimes.com/2011/10/09/opinion/sunday/gdp-doesnt-measure-
happiness.html?_r=1&pagewanted=all
Surveyof CurrentBusiness.(1991,August). GrossDomestic Productasa Measureof U.S.Production.
RetrievedfromBureauof EconomicAnalysis:
http://www.bea.gov/scb/pdf/national/nipa/1991/0891od.pdf
UnitedStatesCentral Intelligence Agency.(2012). Country Comparison:LifeatBirth. RetrievedfromThe
WorldFactbook:https://www.cia.gov/library/publications/the-world-
factbook/rankorder/2102rank.html?countryName
UnitedStatesCentral Intelligence Agency.(n.d.). Country Comparison:GDPperCapita (Purchasing
PowerParity).RetrievedfromThe WorldFact Book:
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2004rank.html?
UnitedStatesCentral Intelligence Agency.(n.d.). GDP(Purchasing PowerParity).RetrievedfromThe
WorldFactbook:https://www.cia.gov/library/publications/the-world-
factbook/rankorder/2001rank.html?

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Gross Domestic Product

  • 1. Gross Domestic Product by ErinSolaro In This Entry Definitionof GrossDomesticProduct Brief Historyof GDP Limitationsof GDP What GDP Countsand What It DoesNot AlternativestoGDP Bibliography Definition of Gross Domestic Product Virtuallyall nationsmaintain National Income andProductAccounts(NIPA).Representativecategories for income include employee wagesandinterestpayments,while representativecategoriesforproducts include governmentordersandconsumeranddurable goods.Statisticiansandeconomiststhen aggregate,or sumup and total these accounts,toproduce a varietyof economicindicators.One of the mostimportantof these indicators,andone of the mostpublicizedandpoliticallysignificant,isthe Gross DomesticProduct. The Gross DomesticProduct(GDP) is the primarymeasure of a nation’sproduction.InAugust1991, the world’slargesteconomy,the UnitedStates,shiftedfromusingGrossNational Product(GNP) toGross DomesticProductas the leadingmeasure of itsproduction.According tothe U.S. Bureauof Economic Analysis,the GDPisthe accumulatedtotal of goodsand servicesproducedinasingle yearbyworkers and plantsor variousotherformsof productive propertylocatedinaparticularcountry,forexample, the UnitedStates. Thisistrue whetherthe workersandthe propertyownersare citizensorforeign residentsof the nationinwhichtheyare located.Incontrast,Gross National Productisdefinedasthe annual total of goodsand servicesproducedeitherbythe residentsor productive propertyownedby the residentsof anation,whetherthose workersandthatpropertyare locatedinthat particularnation or outside itsborders. (Surveyof CurrentBusiness,1991). Brief History of GDP SimonKuznets,aneconomistatthe National Bureauof EconomicResearch,createdthe original formula for the Gross DomesticProductin1937 (KuznetswaslaterawardedaNobel Prize forhiseconomicwork, particularlyforthe National Income andProductAccounts) (Dickinson,2011).Kuznets’workwasdriven not byabstract intellectual curiositybutbya real and pressingneed. Duringthe Great Depressionof the 1930s, the Hooverand Rooseveltadministrationssimplydidnot have access to comprehensivestatisticsonthe UnitedStates’national income andproduction.Instead, policymakershadto cobble togetherapicture of the U.S. economyandthe devastationthatithad sufferedbyrelyingondisconnectedinformationsuchasstock prices andfreightcar loads.Without
  • 2. comprehensive data,acomprehensive responsetothe collapse of amature industrial economywas nearlyimpossible.Kuznetsandhisteamworkedfroma varietyof sourcesthat,exceptforU.S. Internal Revenue Service tax data, were usuallynotcomprehensive,aswell assurveyscommissionedtofill the gap. Aftertwoyearsof researchand analysis,theywere able tocompileindustry-specificestimatesthat approximatedthe UnitedStates’“national income.”Asincompleteasthese estimateswere,theywere still animportantfoundationforPresidentRoosevelt’sApril 1938 “Message to CongressonStimulating Recovery”(Landefeld,Seskin,&Fraumeni,2008; Roosevelt,1938). From MeasuringIncometo MeasuringProduction Income, however,isnotproduction.Asthe UnitedStatesmovedclosertodirectinvolvementinWorld War II,itbecame veryclearthat the governmentneededtoknow whatthe nationwasproducing,both at home and abroad,so it couldadequatelyplanfuturecivilian andmilitaryproduction.Thus,indirect estimatesof final salesof goods,“whichwouldexclude the value of intermediate productsandwould equal incomesearnedbythe factorsof production”froma varietyof sources,suchas durable goods, consumergoods,andmilitaryorders,graduallybecamethe foundationof the GrossNational Product (Landefeld,etal.,2008, p.195) DuringWorldWar II andfor some decadesafterwards,GrossNational Product,notGrossDomestic Product,became the chief meansof measuringU.S.economicproduction.One significantreasonforthis was thatfrom before the UnitedStatesenteredWorldWarI until well afterWorldWarII, the United Statesacquiredsignificantindustrial resourcesoutside itsborders.Some of thiswasBritishproperty, soldto pay forfoodand war materiel,while somewasconfiscatedenemyproperty.Thisacquisitionof productive property,coupledwiththe devastationof WorldWar II,meantthat the UnitedStateshad a verylarge exporteconomythatproduced a greatdeal outside itsborders. By 1991, several generations’worthof economicrebuildingandreconstruction,particularlyinAsia,had transformedthe global economy,andalongwithitthe U.S.economy.The resultwasthat1975 wasthe lastyear the UnitedStatesran a trade surplus (Hawkins,2002).Many of those importedgoodscame fromAsia,fromJapan,Taiwan (the Republicof China),SouthKorea,andthen(mainland) China(the People’sRepublicof China).The U.S.shiftfromGrossNational ProducttoGross DomesticProductas its leadingmeasure of productioninAugust1991 reflectedthesesignificantchanges. Whenthe UnitedStatesadoptedGDP as itsleadingmeasure of production,ittacitlyacknowledgedthat itsrole as the world’spremierexporterhadended.MostothercountrieshadalreadyadoptedGDPas the leadingmeasure of theirproductionpreciselybecause GDPreflectedthe disparitybetweenwhat was producedwithintheirbordersandwhatwasusedwithintheir bordersbutwasproducedoutside them.Measuringthe U.S. economybyGDP meantthat itcouldalsonow be compareddirectlytomost of the world’sothereconomies. However,inAugust1991, the difference betweenthe UnitedStates’GNPandGDPwas statisticallyvery small.The U.S. GNPwas US$5465.1 billionversusaGDP of US$5423.4 billion (Surveyof Current Business,1991).This verysmall discrepancybetweenGNPandGDP was nottrue formany countriesin 1990, andby 2012, ithad ceasedto be true forthe UnitedStatesas well.In2012, the UnitedStatesGDP
  • 3. was US$14.660 trillion,withatrade deficitof goodsandservicesworthUS$516 billion (UnitedStates CensusBureau). However,itisnecessarytobearinmindthat GDP doesnot reflectemploymentand unemploymentstatistics. In August1991, the U.S. Bureau of EconomicAnalysisplannedtocontinue publishingGNPfiguresona regularbasis,officiallystatingthatGDP “wasthe appropriate measure formuchof the short-term monitoringandanalysisof the U.S.economy”preciselybecause “GDPreferstoproductiontakingplace inthe UnitedStates”(Surveyof CurrentBusiness,1991).By 2008, neitherGrossNational Productnorits acronymGNP existsin THE SYSTEM OF NATIONAL ACCOUNTS 2008. A textsearch of the pdf doesnotlocate a single reference toGNP,noris GNPan entryin the glossary.The U.S. transitionfromGNPto GDP as the aggregate statistical measurementof U.S.productionreflectedincreasingforeignownershipof the meansof productioninside itsborders.Bythe same standard,the absence of GNPfrom THE SYSTEM OF NATIONAL ACCOUNTS 2008 reflectsthe realityof the currentglobal economy,whichisthatmanynations have a significantdisparitybetweenwhattheirnationalsproduce,inoroutside theirborders,andwhat othernationalsproduce insidetheirborders. How GDP Is Calculated THE SYSTEM OF NATIONAL ACCOUNTS 2008 “isa statistical frameworkthatprovidesacomprehensive, consistentandflexible setof macroeconomicaccountsforpolicymaking,analysisandresearch purposes”(Inter-SecretariatWorkingGrouponNational Accounts,2012, p. iii). Knownas 2008 SNA, The Systemof NationalAccounts2008 was compiledbythe Inter-Secretariat WorkingGroup onNational Accounts(ISWGNA).Economists,researchers,andstatisticiansfromthe EuropeanCommunity,the InternationalMonetaryFund,the OrganisationforEconomicCo-operation and Development,the UnitedNationsandthe WorldBankworkedwithcentral bureausof statisticsand central banksaroundthe worldtoproduce 2008 SNA. Nationsare encouragedtofollow the guidelines in2008 SNA whentheycompile theirnational accounts,of whichGDPisone of the most important aggregate figures. While 2008 SNA ismeantto serve as a guide forall the national accountsof all countries,italsoallows for local variations.Some countrieswill findsome itemsof onlylimitedinterest,if notcompletely irrelevant.The 2008 SNA alsorecognizesthattablespreparedforpublicrelease will notbe asdetailed as the accounts themselves.The goal of 2008 SNA isnot onlyto adequatelyreflectthe income and productionof moderneconomies,butalsotohelpcreate a recognizablystandardcomparisonamong countriesdespitetheirdifferences.The largergoal istoallow observers,analysts,andpolicymakersnot merelytocompile GDPandother aggregates,butalsotounderstandhow economicsectorsinteract. (Inter-SecretariatWorkingGrouponNational Accounts,2012, pp.iii,xlvii,1) MethodsofCalculatingGDP The 2008 SNA establishesthree standardwaysof calculatingGDP (Inter-SecretariatWorkingGroupon National Accounts,2012, pp. 332–333). Accordingto the 2008 SNA, the firstis the production approach.This meansthatGDP is the final output,minusthe value of intermediate consumption.
  • 4. For example,asheepfarmerwill provide figuresonthe value the sheephave produced,notthe value of theirdressedmeat,theirtannedhides, andtheirspunfiber.The farmerwill alsonotinclude the costof the veterinarycare andfeedamendmentsprovidedtothe sheep.(Thisavoidsdoublecountingbecause the shearer,the butcher,the tanner,the veterinarian,andthe feedstore willproduce theirownfigures for theirproduction.) Tothatfigure,statisticiansaddtaxesandsubtractthe value of subsidiesonthe productif those subsidieshave notbeenpreviouslypaidtothe producer. The secondapproach isthe expendituremodel.Statisticianscalculate the consumptionof all final goods and servicesbyeveryhouseholdinanation.To thissum, statisticiansaddgrosscapital formation,which isa nation’sinvestment,minusitsdisposal of assetstoassistincapital formationorproduce inventories of goodsor valuables.Examplescanbe factories,machinery,orcomputersoftware.Alsoaddedwould be governmentexpendituresof all sortsongoodsand services,suchasuniforms,orinvestmentin researchand development.Finally,the value of the nation’sexportsisadded,andthe value of the nation’simportssubtracted. The third approachis the income model.A nation’sGDPisequal tothe sum of the nation’semployees’ total compensation.Tothis,statisticiansaddthe nation’sgrossoperating surplus,which 2008 SNA definesasthe “contributionof capital toproduction” (Inter-SecretariatWorkingGrouponNational Accounts,2012, p. 418) and mixedincome suchasinterestpaymentsandtaxes.Fromthissubtotal,they subtract anysubsidiesoneitherproductionorimports. In theory,these three methodsshouldproduce the same resultsforthe same nationduringthe same time periods.Inreality,however,oftenthese methodsproduce differentresults,if onlybecause of slight differencesinrounding.These methodsalsouse differentsourcesanddifferentestimationmethods, none of whichare perfect (Landefeldetal.,2008, p. 210). CollectingStatistics The followingexplanationof howa nation’sGDPisestimatedisbasedonthe UnitedStates’methods. Othernationswill use slightly(orvery) differentmodels,andtheirstatisticsmaybe more orlessreadily available.Forexample,GreatBritainusesestimatesfromall three methodsof calculatingGDPto produce a single GDPestimate. (Topicguide to:NationalIncome,ExpenditureandOutput:Overview Tab) The readershouldalsobe cautionedthatnonation,anywhere,nomatterhow transparentits culture,tellsthe truth,the whole truth,andnothingbutthe truthabout itseconomy.Thisisparticularly but notentirelylimitedtosuchobviouslysensitiveissuesasdefense,intelligence,andresearchand developmentexpenditures.Readersinterestedinunderstandingtheirnation’sGDPandthe waythat GDP is calculatedshouldconsultthe websiteof theirgovernmentagencywithresponsibilityfor estimatingandcompilingthese estimates,suchasthe Central Bureauof Statistics. The processoutlinedbelowisagrosslysimplified,theoretical glossof anauthoritative accountof a single nation’sestimatingprocedurethatwasneverthelessitself simplified. (Source throughoutthis section,unlessotherwise noted,isLandefeldetal.,2008, pp.196–199). An agencyof a national government,suchasthe Bureauof Economic Analysisof the Central Bureauof Statistics,estimatesthe national GDPaccordingtothe expendituresmodel.(The mathematical formula
  • 5. for the expendituresmodel is:C+ I + G + (X - M), withC= Consumption,I=investment,G= government expenditures,X = exportsandM = imports.) Every five years,inyearsendingin2 and 7, thisBureauof EconomicAnalysisconductsaneconomic censusof “virtuallyall”the businesseslocatedinthe nationthatpaytheiremployees.The Bureauthen analyzesthe data,supplementingitwithstudiesandsurveyswhennecessary,thenadjustingthe figures, to formthe basisof the nominal GDPfor what isknownas a benchmarkyear.For large economies,this processcan take several years.The resultingestimate isknownasthe nominal GDP,whichisthen deflated,oradjustedforinflation. These GDP andother NIPA estimatesare thenpresentedin“chained”currencies:forexample,the U.S. GDP estimatesare currentlypresentedinchained2005 dollars.Inthe wordsof the U.S.Bureau of EconomicAnalysis,“chain-type estimatesprovide the bestavailablemethodforcomparingthe level of a givenseriesattwopointsintime.Chained-dollarestimatesare obtainedbymultiplyingthe chain-type quantityindex foranaggregate byits value incurrentdollarsinthe reference year[2005] and dividing by 100” (NIPA TablesHelp).The resultof thisanalysisisaGDP estimate thatreflectsthe nation’scurrent abilitytocollecteconomicdataandorganize itaccordingto national priorities.Forexample,in1999, the UnitedStatesbeganrecognizinginvestmentincomputersoftware asafixedinvestment.Anynationwill have similarexamplesof itsown. Like populationcensuses,economiccensusesare treasure trovesof data.However,evenif acountry choosestoconduct economiccensuses,theyonlyoccureveryseveral years.The benchmarkGDP estimatestheyenable lagbyseveral yearsbecause itrequirestimeandefforttoanalyze sucha large trove of data.Thus a nation’sCentral Bureauof Statistics mayalsoestimate the GDPon an annual and quarterlybasisbysamplingfirmsthatreporttoit. Typically,responsestoformal census,whether populationoreconomic,are mandatory,butrespondingtoannual orquarterlysurveysmaybe voluntary,depending ona nation’spolicies.Foranideaof scale,as of 2008, the annual U.S. sample size has beenabout150,000 respondents,andthe quarterlyabout35,000; inthe UnitedStates,response to the formerismandatoryand to the latter,voluntary.(Incomparison,the U.S.benchmark,oreconomic census,sample hasmore than7 millionrespondents.) In mature economieswithanaccomplishedcivilservice,quarterlyestimatescanappearinthree phases. These estimatesmightbe baseduponmonthlysurveydataprovidedbyrespondents,augmentedby extrapolationsbythe Bureauof EconomicAnalysis.AnAdvancedQuarterlyEstimate of GDPwouldbe issuedaboutone monthafterthe quarterended.Approximatelyone monthafterthe Advanced QuarterlyEstimate,ortwomonthsafterthe quarter ended,additional andrevisedsurveydatawouldbe incorporatedintothe PreliminaryQuarterlyEstimate.Three monthsafterthe endof the quarter,the Final QuarterlyEstimate ispublished.Thenthe Bureauof EconomicAnalysismaychoose tore-examines itsGDP estimatesforthatcalendaryearanda setperiodof precedingyearsinordertoadjustitsGDP estimatesbasedonanynewinformation,suchasfromannual surveys,industrysurveys,andother sourcesof information,includingthe nation’stax authorities.
  • 6. Limitations of GDP GDP reflectsonlythatwhichcan be counted.If “it” cannotbe counted,orif a nation’spolicymakersdo not want“it” counted,“it”will notbe reflectedinGDP,nomatterhow important“it”is inthe real life of a nation. Gross DomesticProductisthe most importantaggregate of the National Income andProductsAccounts, at leastintermsof publicuse.Alongwithunemploymentfigures,the GDPisthe single statistic politiciansare mostlikelytopointtowhen theywishtosay,“Look, the economyisgrowing!We’re booming!”or“Look, the economyisshrinking!We’re inrecession!”Certainly,if youunderstandGDPas an aggregate figure andare willingtotake some time diggingintothe NIPAsthatproduce it,you can learna great deal aboutan economy.Youcan learnhow much of itsproductionisagricultural,how much industrial,howmuchisservices.Youcan alsoascertainwhattypesof goodsare beingproduced, whatsectors produce what,andduringwhat timeframe. However,since Kuznetsandhisteambeganthe workthat createdthe conceptof GDP, economistshave recognizedthatwhile GDPreflectsimportantinformationaboutaneconomy,itisaninadequate reflectionof the totalityof economies.GDPpoorlyreflectsthe economicrealitiesof the livesof the humanbeingsinthe economy.Kuznetsstatedthisexplicitlyin1934, as he wrote in hisveryfirstreport to Congress,“The welfare of anationcan, therefore,scarcelybe inferredfromameasure of national income”(Rothkopf,2011). Kuznetsandhisteam of economistsknew whentheyreleasedtheir statistical workthattheywere dealingwithnumbers,andnumbersonlyreflectthingsthatcan easilybe counted.Thisisthe fundamental limitationof economics:If itcannotbe countedorif itis notsocially valuedenoughtobe counted,itdoesnotexist. What GDP Counts and What It Does Not GDP counts onlythe goodsandservicesproducedwithinacountry,notthose of that country’s “competitors.” GDP doesnot reflectthe identityof the ownersof the meansof production.Are theyindividual citizens or cooperatives,smalllocal companies,large multinationals?The statisticissilent. GDP doesnot reflectthe identityof the producers. Are theycitizens,legal aliens,illegal immigrants desperate forabetterlife,robots? GDP doesnot reflectthe payandtreatmentof workers.Itdoesnot reflectunemploymentand underemploymentfiguresandwhatthe opportunitycosttosocietyisof theirlostintelligence,ambition, energyandtalent,creativity,andcontributions. GDP doesnot reflectaverage nationalincome,aneconomicindicatorof itsown.Itdoesnot reflectthe distributionof income andaccumulatedwealth,eventhoughhighdegreesof inequalitycarrysignificant economiccosts.
  • 7. GDP doesnot reflectwhatismade bya society’sworkers,orhow well itismade.Certaincountrieshave a reputationfordesignandcraftsmanship,while othercountriesdonot.GDPdoesnot representthe humancost of shoddygoods,asopposedtothe humansatisfactionof the well-made. By the same standard,GDP doesnot mentionwhatacountry isactuallyimporting.Isitimportingluxury goods,high-tech,ormachine tools?If anationisimportingdurable goods,isitdoingsobecause itno longermanufacturesthese itself,orisitinthe processof creatingitsown manufacturingbase?Doesits foreigntrade balance forseveral years,ordoesitrun deficitsorsurplusesyearafteryear? GDP doesnot count the downstreamcostsof imports,especiallywhennationsrunhightrade deficits yearafter year.It doesnotanswerthe questions,if anationhada policyof runninga trade balance, bothin termsof costs and technology,wouldithave ahigherGDP, lessunemployment,alargerand deepermanufacturingsector? GDP doesnot include environmentaldamage done toacountry byits industrial,agricultural,andsocial policies. GDP doesnot countunpaidlabor,evenwhenitisabsolutelyvital tosociety,evenwhen,if itisnotdone well,forwhateverreasons,the economicdimensionsof the humancostcan be veryhigh.Raising childrenandcaringfor the elderlyare twoobviousexamples.The economistMarilynWaringfirst formulatedthiscritiquewiththe 1988 publicationof herbook COUNTING FOR NOTHING: WHAT MEN VALUE AND WHAT WOMEN ARE WORTH, a critique thenconsideredmarginal,butnow becoming mainstream. GDP doesnot include personalproductionthatisnevermeanttobe soldonthe formal market,whether it isfor home use or barter.Thiscottage productioncanrange from unskilledandundistinguished productsto workthat is betterthansimilaritemsproducedbyanyone buta veryfew mastercraftersin specializedworkshops.Therefore,notonlycanthe productionnotbe seen,buta range of valuescannot be assignedtoit because itnevercomesonthe market. GDP doesnot include the undergroundeconomy:legitimateworkof all sortsthat ispaidfor incash, as well asthe salesof humanbeings,drugs,andstolenproperty.The firstrobsnotonlythe state of tax revenue,butalsoall the people wholive inthatstate,all of whomuse the wide varietyof social services and governmentprogramsthose taxesfund.The secondimposeshorrendouscostsonsocietyby eliminatingafloorunderneathhumanbeings,below whichnohumanbeinginthe nationcanbe treated. To get an accurate depictionof the real healthof anynation’seconomy,individualshave toaskthese questionsandothers.The wise investorcannotrelyona single statistic,norcan the wise citizen.The answersalwaysdependuponthe questionsasked. Alternatives to GDP Finally,GDPdoesnotreflectqualityof life orhappiness,eitherpersonal orsocial.There iswidespread recognitionamongseriouseconomistsandpolicymakersaboutthe limitationsof GDP.Meanwhile,there
  • 8. are nascentalternatives,suchasthe U.N. HumanDevelopmentIndexandthe EuropeanUnion- sponsoredCommissiononthe Measurementof EconomicPerformance andSocial Progress.In2004, Chinabeganto developaGreenGDP program, an attemptto calculate the economiccostsof pollution. That initiativewassuppressedin2007, but by early2012, there were indicationsinthe Chinesepress that itwas beingresurrected (Lelyveld,2012).As of 2012, however,nosingle alternative statisticwas widelyusedtoconveythe totalityof anation’seconomicperformance the wayGDPis. The followingtable isarankorder of the top 10 nationsor national regionsbyGDP,GDP percapita, Life Expectancyat Birth,and theirU.N.Human Developmentrankingsasof September2012. It can be readilyseenthatwhile GDPisimportant,itisalsonotthe totalityof a nation’seconomyandthe impact of thateconomyuponhumanlives. GDP (UnitedStates Central Intelligence Agency) GDP per Capita (UnitedStatesCentral IntelligenceAgency) Life Expectancy at Birth (UnitedStates Central Intelligence Agency,2012) UN Human DevelopmentIndex (InternationalHuman Development Indicators,2011) EuropeanUnion Liechtenstein Monaco Norway UnitedStates Qatar Macau Australia China Luxembourg Japan Netherlands India Bermuda Singapore UnitedStates Japan Singapore San Marino New Zealand Germany Jersey Andorra Canada Russia FalklandIsles/ IslasMalvinas Guernsey Ireland Brazil Norway Hong Kong Liechtenstein UnitedKingdom Brunei Australia Germany France Hong Kong Italy Sweden Bibliography Dickinson,E.(2011, January/February). GDP:a Brief History: OneStat to Rule ThemAll. Retrievedfrom ForeignPolicy: http://www.foreignpolicy.com/articles/2011/01/02/gdp_a_brief_history Hawkins,W.R. (2002, December18). USTrade RepresentativeCelebrates40 Years of Failure. Retrieved fromAmericanEconomicAlert.org: http://americaneconomicalert.org/view_art.asp?Prod_ID=713 InternationalHuman DevelopmentIndicators.(2011,November2).RetrievedfromUnitedNations Human DevelopmentReports:http://hdr.undp.org/en/statistics/ Lelyveld,M.(2012, 02 13). China's'Green GDP' Resurfaces.RetrievedfromRadioFree Asia: http://www.rfa.org/english/energy_watch/greengdp-02132012120520.html
  • 9. NIPA TablesHelp. (n.d.).RetrievedfromBureauof EconomicAnalysis: http://www.bea.gov/national/nipaweb/NIPAHelp.htm Rothkopf,D.J. (2011, October8). Redefining theMeaning of No.1. RetrievedfromThe New YorkTimes: http://www.nytimes.com/2011/10/09/opinion/sunday/gdp-doesnt-measure- happiness.html?_r=1&pagewanted=all Surveyof CurrentBusiness.(1991,August). GrossDomestic Productasa Measureof U.S.Production. RetrievedfromBureauof EconomicAnalysis: http://www.bea.gov/scb/pdf/national/nipa/1991/0891od.pdf UnitedStatesCentral Intelligence Agency.(2012). Country Comparison:LifeatBirth. RetrievedfromThe WorldFactbook:https://www.cia.gov/library/publications/the-world- factbook/rankorder/2102rank.html?countryName UnitedStatesCentral Intelligence Agency.(n.d.). Country Comparison:GDPperCapita (Purchasing PowerParity).RetrievedfromThe WorldFact Book: https://www.cia.gov/library/publications/the-world-factbook/rankorder/2004rank.html? UnitedStatesCentral Intelligence Agency.(n.d.). GDP(Purchasing PowerParity).RetrievedfromThe WorldFactbook:https://www.cia.gov/library/publications/the-world- factbook/rankorder/2001rank.html?