Gross domestic product

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 do 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 producing an annual statistic called Total Output.