Gross Domestic Product methods for calculating gross product. Gross domestic product. Methods for measuring GDP. Final goods and services, intermediate product

GDP indicator (general characteristics)

Economic growth is not a simple and versatile enough phenomenon. Behind the usual method of expressing it, for example, the growth of GNP, GDP and personal income, there is a whole system of interaction between different aspects of economic life. Economic growth is a complex phenomenon and can be expressed not only as the level of economic development, but also as a process characterized by many quantitative and qualitative indicators. Among them, the following indicators stand out as priority ones, such as the absolute increase in real GDP and personal income for a certain period, and including the change in these indicators per capita. For example, the GDP of India is almost 70% higher than the GDP of Switzerland, while the standard of living of the population of India is lower than the state of Switzerland by more than sixty times. In Russia, the most dynamic GDP growth in recent decades was recorded in the period from 2000 to 2008 and amounted to an increase of 48% (Table 1).

Figure 1. Dynamics of GDP in 2000 - 2008, in% of the previous year. Author24 - online exchange of student papers

Nevertheless, the indicator of gross domestic product remains one of the key indicators characterizing the final result of the production activity of the state.

Production method for calculating GDP

GDP is calculated using several methods. One of them is the calculation of the amount of gross value added, it is also called the "production method" for calculating GDP. Gross domestic product at the production stage is calculated in this way as follows: GDP = GVA, where GVA is gross value added.

Gross value added denotes the difference between the value of produced national products (goods and services) and the actual value of these goods and services, fully used in the production process (the so-called "intermediate consumption"). Gross value added contains the consumption of fixed capital, and the value added measure is needed to measure the value that arose during the production period. Accordingly: VDS = V - PP, where:

• B is the output of products (goods and services);
• PP - intermediate consumption, that is, the value of goods and services (excluding investment products) consumed in a certain period for the purpose of producing other products (goods and services). It includes:
  • costs of raw materials, fuel, energy, food, medicines and workwear, etc .;
  • payment for work and services rendered by other business entities, including repair work, transportation, utilities, advertising costs, services of credit institutions (banks), etc .;
  • travel expenses, including travel tickets and hotel.

The formula for calculating GDP in a production way looks like this:

GDPproduct = Σ GVA + NNP

NNP - net national product left after deduction of depreciation charges. Let's give a simple example of calculating GDP in a production way.

Example 1

• B (production output at basic prices) = 100.00 rubles;
• PP (intermediate consumption) = 55.00 million rubles;
• Nprod. (taxes on products) = 9.5 million rubles;
• Sprod. (subsidies for food) = 2.5 million rubles

• GDP = B - PP + Nprod. - Sprod., Respectively
• GDP = 100.00 - 55.00 + 9.5 - 2.5 = 54.25 million rubles.

To summarize - calculating GDP by the production method means the sum of the gross value added of all industries or sectors of production at basic prices + net taxes on products. The sum of GDP is calculated as the value of output (B) minus intermediate consumption (PP). Net taxes on products (NPTs) are calculated as any taxes on products less subsidies on products, excluding those already included in the cost of output (B).

End-use method (revenue use method)

Gross domestic product, measured at market prices, is represented by the formula:

GDP = GVA + NNP + NNI, where:

• GVA - gross value added;
• CNP - net tax on the national product;
• CHNI - net import tax.

NNP is calculated as a result of subtracting C (subsidies) and NP (tax on products. Subsidies (C) are current uncompensated payments from the federal budget for subjects of production (enterprises), taking into account the fact that they produce a certain type of product or service.

CHNI = NO - S, that is, subsidies are deducted from the amount of import taxes.

Example 2

Let's calculate GDP by the end-use method.

• KP (final consumption) = 30.50 million rubles. (including final consumption expenditures of households, final consumption expenditures of government, final consumption expenditures of non-profit organizations serving these households;
• GN (gross capital formation) = 20.00 million rubles. Gross capital formation includes gross fixed capital formation, changes in inventories, purchases of valuables (less disposal, that is, net acquisition of valuables).
• E (export of goods and services) = 12.50 million rubles;
• And (import of goods and services) = 8.25 million rubles.
• We use the formula GDP = KP + VN + (E - I),
• GDP = 30.50 + 20.00 + (12.50 - 8.25) = 54.75 million rubles.

It is worth noting that the GDP calculated by the use of income method differs from the GDP calculated by the production method by the difference (value) of the statistical discrepancy. In our case, by 0.5 million rubles (54.75 - 54.25 = 0.5).

Method of formation by sources of income (pay-as-you-go method)

The formation of primary income includes the following types: wages of employees, net taxes on production and imports (also taxes on production and imports minus subsidies on production and imports), gross profit and gross mixed income.

Accordingly, the calculation of GDP by the method of formation by sources of income looks like:

GDP = OT + VP + GVA + Nproduct. and imp.- Proceed. and imp., where:

• OT - remuneration of employees is cash or in-kind remuneration paid to employees for the amount of work done in the reporting period (including gross wages, post-social security contributions and imputed social security contributions) ;
• GP is gross profit and gross mixed income;
• Np. and imp. - taxes on production and imports;
• Prod. and imp. - subsidies for production and imports.

The distribution method for calculating gross domestic product is primarily used to study its value structure. If we add to the GDP the primary incomes extracted from the rest of the world and subtract the primary incomes given to the rest of the world, then the result is the gross national income of the state (GNI) in market prices.

Three methods can be used to calculate GDP:

by cost (end-use method);

by income (pay-as-you-go method);

value added (production method).

The use of these methods gives the same result, since in economics

the total income is equal to the amount of total costs, and the amount of value added is equal to the cost of the final product, while the amount of the cost of the final product is nothing more than the sum of the costs of final consumers for the purchase of the total product.

Gross domestic product, calculated by expenditures, is the sum of expenditures of all macroeconomic agents, which includes: household expenditures (personal consumption expenditures); costs of firms (investment costs); government spending (government purchases of goods and services); foreign sector expenditures (net export expenditures).

Personal consumption expenses, С (consumption) - This is the expenses of households for the purchase of goods and services. In developed countries, they account for about 2/3 of total expenditures and are the main component of total expenditures. Consumer expenses include:

expenses for current consumption - for the purchase of non-durable goods that serve less than one year (However, all clothing, regardless of the period of its actual use - 1 day or 5 years - refers to current consumption.);

expenses on durable goods that have been used for more than one year (furniture, household appliances, cars, etc.) (with the exception of expenses for the purchase of housing, which are attributed not to consumer expenses, but to investment expenses);

service costs.

Personal consumption expenditure = household current consumption expenditure + expenditure on durable goods (excluding household expenditure on buying a home) + expenditure on services

Investment costs, I- This is the costs of firms for the purchase of investment goods. Investment goods are understood as goods that increase the capital stock. Investment costs include:

fixed capital investments, which include the costs of firms:

for the purchase of equipment

for industrial construction (industrial buildings and structures);

housing investment equal to household spending on housing;

investments in inventories (inventories include:

stocks of raw materials and materials necessary to ensure the continuity of the production process;

work in progress, which is associated with the technology of the production process;

stocks of finished (manufactured by the company), but not yet sold products

In the system of national accounts, only expenditures on the purchase of investment goods are considered investments. Any other expenses that may generate income in the future (for example, the purchase of securities, antiques, works of art, etc.) are not considered investments.

When calculating GDP by spending, investment is understood as gross private domestic investment.

In accordance with the peculiarities of the functioning of fixed capital, investments are divided into gross, net and recovery. In the process of use, fixed capital wears out, is "consumed" and requires replacement, "restoration" of wear. The part of the investment that goes to replace the depreciation of fixed capital is replacement investment and is called capital consumption allowances or amortization A.

Net private domestic investmentI net (net private domestic investment) represent additional investments that increase the size of the capital of firms. They are the basis for expanding production, increasing output.

Gross private domestic investmentI gross (grossprivate domesticinvestment) represent the total investment, the amount recovery and clean investment:

I gross = A + I n

According to the form of ownership, investments are divided into private ones, i.e. investments of private firms, and public. In the system of national accounts, only private investment is classified as investment expenditure, while public investment is included in public procurement of goods and services.

In addition, only domestic investments are considered as investments in the system of national accounts, i.e. investments made in the economy of a given country.

State purchases of goods and services,G include:

government consumption, which includes: the cost of maintaining government institutions and organizations that regulate the economy, security and law and order, political governance, social and industrial infrastructure, and b) payment for services (salaries) of public sector employees;

public investment, i.e. investment expenditures of state-owned enterprises. (Government expenditures of federal, regional and local authorities on final products of enterprises and on direct purchases of resources, especially labor from the state. However, this group of expenditures excludes all government transfer payments).

A distinction should be made between the concept of "government purchases of goods and services" (government spending) and the concept of "government spending". The latter concept also includes transfer payments and interest payments on government bonds, which, as already noted, are not taken into account in GDP, since they are neither a good nor a service and are not provided in exchange for goods and services.

Net export,NS n represents the difference between export earnings ( Ex) and the country's import costs (Im) and corresponds to the trade balance:

Xn = Ex - Im.

The equation Gdp by expenses = C + I gross + G + Xn–this is the basic macroeconomic identity.

The difference between the components of GDP - C, I g, G, X n - is based on the difference between the types of buyers who carry out these costs (households, firms, government, foreigners), and not on the difference in purchased goods and services. Thus, a car bought by a household is included in component C if it is purchased by a firm - it is part of an investment in fixed assets, etc. The exception is investment in housing construction, which is included in GDP without dividing it into components, depending on who made these investments - households, business or the state.

In developed countries, the largest component in the structure of GDP is consumer spending (C) - from 50 to 78%; the most volatile - investment costs (I g); G is from about 10 to 25%.

In Russia in 1999, the final consumption of households and non-profit organizations amounted to 54% of GDP, and in 2002. - 49.8%.

Gross private domestic investment is the most dynamic and volatile component of GDP, since the amount of investment is directly related to the availability of lucrative uses for capital. There are many of the latter during periods of economic prosperity and almost never remain during times of crises. During the crisis of economic transformation in Russia, the share of gross investment fell from 37% in 1991 to 15% in 1999. In 2002, the share of this indicator was 21.1%. The share of government purchases of goods and services and net exports in the Russian Federation in 1999 was 15% of GDP, and in 2002 these indicators were at the level of 16.9% and 10.8%, respectively.

Method of measuring GDP by income

With this method of calculating the GDP, it is considered as the sum of the incomes of the owners of economic resources (households), i.e. as the sum of factor incomes, which include:

wages of workers and salaries of employees of private firms - income from the factor "labor", including all forms of remuneration for labor: basic wages, bonuses, overtime pay, etc. Civil servants' salaries are not included in this indicator, as they are paid from the state budget and are part of public procurement and not factor income;

rent or rental payments - income from the “land” factor, including payments received by the owners of real estate (land plots, residential and non-residential premises). If the landlord does not lease part of the premises, then the system of national accounts takes into account the income that he could receive if he provided these premises for rent. These imputed incomes are called "imputed rent" and are included in the total rental payments;

interest payments or interest on loan capital - income from the “capital” factor, which includes all payments that private firms make to households for the use of capital (including on their bonds). Interest paid on government bonds is not included in this indicator, as these payments are the result of redistribution, not the creation of national income;

profit is the income from the entrepreneurial ability factor. In the system of national accounts, in accordance with the differences in the organizational and legal forms of firms, the following are distinguished:

profit of the unincorporated sector of the economy, including sole (individual) firms and partnerships based on their own (possibly borrowed) capital; this type of profit is called "income of the owners of the unincorporated sector";

profits of the corporate sector of the economy based on joint-stock ownership; this type of profit is called "corporate profit" and is divided into three parts: corporate income tax; dividends that the corporation pays to shareholders and the retained earnings of corporations, which serves as one of the internal sources of financing for net investment and is the basis for the expansion of the corporation's production.

In addition to factor income, GDP calculated by income includes:

Net indirect business taxes (taxes minus subsidies). These taxes (value added tax, sales tax, excise taxes, customs duties) are part of the price of a product or service. A feature of indirect taxes is that they are paid by the buyer of the goods or services, and the company that produced them pays to the state. Since GDP is a value indicator, as in the price of any commodity, it should include indirect taxes;

depreciation (cost of capital consumed), which should be taken into account when calculating GDP, since it is also included in the price of any commodity;

net factor income from abroad, since not only national, but also foreign factors are used to create the country's GDP.

Gdp by income = Salary + Rent +

Interest payments + Income of non-corporate sector owners + + Corporate profits + Net indirect taxes + Depreciation -

- Net factor income from abroad.

Method of calculating GDP at value added

With this method, the gross domestic product is determined by summing the value added for all sectors and types of production in the economy:

GDP = sum of value added

GDP, calculated as the sum of the VC, makes it possible to identify:

The ratio and role of individual industries in the created gross product: GDP (GNP) is taken as 100% and the share of individual industries is calculated. For example, the United States has a high share of the service sector in the creation of GNP (72%), but this does not mean that the level of the country's industrial development is lower;

Changes in the structure of the gross product and the dynamics of development of individual sectors of the national economy when comparing GDP (GNP) for production over a number of years;

The nature of the economic and especially structural policy implemented in the country;

Features of the structure of the country's economy by comparing this indicator and its structure with a similar indicator in other countries.

GDP = ∑ DS of all manufacturers of goods and services produced in the territory of a given country (residents) - ∑ DS of non-residents (living in the country for less than a year).

The choice of one or another method for calculating GNP (GDP) is determined by the availability of a reliable information base: the production method and the end-use method are most often used. Naturally, GNP (GDP) calculated by any of the three methods are equal.

Macroeconomic theory uses another important indicator - potential GDP (Y *), which means the long-term production capabilities of the economy with the maximum use of available resources in conditions of stable prices. In other words, potential GDP is defined as the level of GDP corresponding to full employment of all resources. This indicator is of particular importance in the study of the problems of economic cycles, inflation, economic growth, when the reasons for the deviation of the actual GDP from its potential level are analyzed.

At the same time, it should be noted that it is difficult to calculate the potential GDP. So, due to the use of different initial values, such as the natural unemployment rate (the unemployment rate that does not raise the general price level, or inflation) or the degree of completeness of the utilization of production capacities, estimates of the country's potential GDP for a certain period can vary greatly.

Net domestic product,

National income.

The gross domestic product (GDP), as the gross national product (GNP), is defined as the value of the total volume of final production of goods and services in the economy for one year (quarter, month). They are calculated in both current (current) and constant (any base year) prices.

GDP is calculated by the so-called territorial basis. This is the total cost of products in the spheres of material production and services, regardless of the nationality of enterprises located on the territory of a given country.

GNP - is the total cost of the total volume of products and services in both areas national economy regardless of the location of national enterprises (in their own country or abroad).

GNP differs from GDP in the amount of factor income from the use of the resources of a given country abroad (the profit transferred to the country from the capital invested abroad, the property available there; the salary of citizens working abroad transferred to the country) minus the similar income of foreigners exported from the country. For developed countries, the difference in the size of GDP and GNP is about one percent of GDP. A significant excess of GDP over GNP indicates a high degree of dependence of the national economy on foreign capital.

The national accounts are compiled using the double-entry principle applied in the balance sheet. This standard system of accounts has been used in more than 100 countries since the 1970s.

The main requirement in calculating the GDP indicator is to take into account only the final product. This is done in order to avoid re-counting. When calculating GDP, intermediate products are not taken into account, but only final products, only value added, are taken into account.

End products are goods and services that are purchased by consumers for end use and not for resale.

Intermediate products are goods and services that undergo further processing.

Added value- the value created in the production process at a given enterprise and reflecting its real contribution to the creation of the value of a particular product. This is the market price of manufactured products minus current material costs, but with the inclusion of depreciation deductions. It includes salaries, profits and depreciation of a particular company.

The cost of consumed raw materials and materials that were purchased from suppliers, and in the creation of which the enterprise did not participate, are not included in the added value of the product produced by this enterprise.

In the extractive industry, all value will be added.

Three methods are used to calculate GDP:

1. Summing up the added value for all sectors of the national economy, i.e. calculation of GDP by production;

2. Summation of all expenses for the purchase of the total volume of products produced in a given year, i.e. calculation of expenses;

3. Summing up all the income received in the country in a given year, i. E. calculation of income.

GDP by industry (by production) is calculated as the sum of the added value of all sectors of the national economy, including the service sector. An analysis of the GDP indicator calculated by this method makes it possible to reveal the ratio and role of individual industries in the creation of GDP.

GDP by expenditure (by method of use) is defined as the sum of final consumer spending on goods and services, government purchases of goods and services, gross capital formation (investment), the balance of exports and imports of goods and services (net exports).

End household consumption expenditures include expenditures on consumer goods, durable consumer goods, consumer services expenditures, etc.

End government spending(state. institutions) include the costs of state and municipal authorities on the salaries of their employees, public sector employees, for the purchase of goods and services for state needs. But this does not include transfer payments to retirees and other persons, because these costs are not related to the production of current products.

Gross investment are subdivided into net investment (funds for the expansion of production) and depreciation charges (funds for the restoration of means of production).

The size of investments can be used to determine the state of the economy: if the gross investment is more than depreciation, i.e. net investment is greater than zero, then the economy is booming, it is growing; if gross investment is equal to depreciation, then net investment is zero, the economy is stagnant; if gross investment is less than depreciation, then this is a recession, a crisis.

Net exports of goods and services calculated at domestic prices. This is the difference between exports and imports: if exports are greater than imports, then net exports are with a plus sign, if imports are greater than exports, then net exports are with a minus sign.

GDP by source of income calculated as the sum of wages, gross profit and net taxes.

This GDP calculation reflects primary, i.e. not yet redistributed, incomes of households, enterprises and government agencies. These incomes include wages (salaries of employees, self-employed workers, income from individual and family partnerships and cooperatives), gross profit (rent, loan and bank interest, entrepreneurial income, depreciation deductions) and various types of mixed income, and net taxes (table 3).

In general, the value of GDP in terms of expenditures and incomes should be the same, since the costs of producing goods and services are reimbursed in the form of income received from the sale.

In summary: income = expenses = added value.

The following macroeconomic indicators are given, billion dollars:

Define:

GDP (in two ways), net exports, gross investment, net factor income from abroad, GNP, PVP, ChNP, ND, LD, RLD, personal savings, corporate income tax, state budget balance.

Solution:

1) Gross domestic product, calculated by spending, represents the sum of expenditures of all macroeconomic agents, which includes: consumption spending (C), gross private domestic investment (Igross), government purchases of goods and services (government spending - G), and net export (net export - NX):

Gross investment is the sum of the net investment and the cost of capital consumed (depreciation):

Net exports (net export - NX) is the difference between export earnings (export - Ex) and the country's import costs (import - Im) and corresponds to the trade balance:

Thus, the calculation of GDP by expenditure is as follows:

2) Gross Domestic Product, calculated by income, represents the sum of income from national and foreign factors. It is defined as Salary plus Rent plus Interest Payments plus Property Income plus Corporate Profit plus Indirect Business Taxes plus Depreciation (Cost of Fixed Capital) less Net Factorial Income from abroad.
Net factor income from abroad is the difference between income received by citizens abroad and income received by foreigners in a given country:

Let's calculate GDP by income:

4) Knowing GDP, as well as the value of net factor income from abroad, one can find GNP:

5) Net domestic product (NPP) is equal to the difference between gross domestic product and the cost of capital consumed (A):

6) The net national product (NNP) is equal to the difference between the gross national product and the cost of consumed capital (A):

7) National income - ND (National Income - NI) - is the total income earned by the owners of economic resources. It can be calculated in two ways:

National Income is equal to the sum: Wages plus Rent plus Interest payments plus Property Income plus Corporate Profit.

8) To calculate personal income (personal income - PI), it is necessary to subtract from the ND everything that is not at the disposal of households and is part of the collective, not personal income, and add everything that increases household income, but is not included in ND.

9) Disposable personal income - РЛД (disposable personal income - DPI) income at the disposal of households. RLD is calculated as the difference between Personal Income and Individual Taxes.

10) Households spend disposable personal income on personal consumption and personal savings.

Gross Domestic Product (GDP) is the sum of the values ​​of all goods and services produced in the state. Indicated in US dollars. Determined at the end of the fiscal year. By calculating GDP annually, you can track the development of the economy. The change in the indicator can indicate how successful the economic policy has been in the state. Knowledge of how to calculate GDP will help to understand the course of many macroeconomic processes. Methods for calculating GDP involve the use of one of three methods

End-use method or calculation of gross domestic product by expenditure

Calculating the GDP indicator in this way, you need to add up the costs of all participants in the economic process, namely:

• Consumer expenditures of citizens (All expenditures that are carried out by households, as well as the state on the maintenance of budgetary organizations, expenditures of non-profit firms for the purchase of personal and shared products, if organizations serve households; at the same time, expenses are long-term, for example, buying a car, and short-term - the purchase of products, expenses for the purchase of services, including on credit, are separately allocated);
• A set of investments in the economy (Investments are funds invested by an organization or an individual, for example, in the purchase of equipment, as well as the purchase of real estate or software for the operation of the company. The exchange of assets is not considered an investment, and the acquisition of funds is a saving. Also, the purchase itself securities are not considered an investment if subsequently the company does not use this proceeds to modernize production, etc.)
• Government expenditures (Funds spent by the state on the purchase of final goods. This includes the payment of salaries to public sector employees and the purchase of weapons, as well as government investments.)
• Net exports (is the difference between the total value of imported and exported products)

We get the GDP per capita formula, which determines the GDP by the end-use method:

GDP = C + I + G + Xn

In the formula for costs: C - consumer spending, I - investment, G - government. costs and X is the indicator of net exports (we subtract the amount of imported ones from the total value of exported goods).

Production method or finding the sum of all added values

To calculate the GDP indicator in this way, it is required to add up all the added value of goods manufactured in the country. Value added is one that does not include market prices for products purchased to make a final product or service, hence the value that arose in production. Otherwise, when calculating GDP, some goods / services will be counted twice, and the result will be significantly distorted upward.

The advantage of this method is that it allows you to assess the role of a certain production, organization in the structure of state GDP. To find the DS (value added), you need to subtract the amount spent on the products needed in production from the profit received during the sale.

We get the following formula for calculating GDP:

GDP = DS + NPI - S

where: DS - value added, NPI - tax on production and imports, and C - subsidies on imports and manufacturing.

Method of accounting for GDP by income or pay-as-you-go method

To find the level by this method, you should add up all kinds of factor income and add depreciation and indirect taxes. The last two components are called non-profitable.

The GDP formula by income will include:

• salaries of employees of the organization (this also includes additional and social benefits, for example, bonuses and pensions)
• gross mixed income and gross profit (funds remaining with the manufacturer, who paid employees and paid taxes to the treasury)
• taxes on imports and production (mandatory payments to the state due to legislation. This includes duties, land tax, VAT, license tax, etc.)
• rent
• depreciation
• interest on bank deposits

The GDP does not include transfer payments (which have not been replaced). These include unemployment benefits and other social benefits. government payments, for example, pensions, as well as the purchase of second-hand goods, financial transactions between individuals.

We get the following formula for calculating GDP:

GDP = ZP + R + Pr + VD + KS + A - PFD (from abroad)

in which: salary is the funds spent on employee benefits, P is the cost of rent, Pr is income from interest on, KS is indirect taxes, A is depreciation and PFD is foreign net factor income.

Nominal and real GDP

GDP is calculated in money, therefore it is necessary to take into account the dynamics of prices during the reporting period. Therefore, there are two types of GDP.

The nominal is determined in the prices existing at the moment. It can increase in two cases: with an increase in production volumes and with an increase in prices. Real GDP is calculated taking into account the prices of the base period - the one that is taken as the basis. For example, in the United States - 1996.

Real GDP is an indicator of the volume of production, since an increase or decrease in prices does not change its indicator. To find real GDP it is necessary to adjust the nominal by the price index. For this, the indicator of nominal GDP must be divided by the price index, which is equal to the ratio of prices in the considered year to prices in the base year.

To bring the nominal GDP to the real indicator, you need to know the consumer price index or. The CPI is influenced by the cost of the 300 most commonly purchased goods, and the GDP deflator summarizes the change in prices for all goods.

PPP GDP Adjustment

In order to ensure maximum objectivity in comparing the GDP of different countries, GDP is calculated at purchasing power parity (PPP). This is due to the fact that, although the calculation of GDP in all world states is carried out in US dollars, this does not take into account the purchasing power of money in different countries and the difference. The number of identical items purchased for $ 10, for example, in Canada and Nepal, will differ significantly. To eliminate the errors associated with the difference in the cost of living of different countries, a method was developed for calculating GDP at PPP. This indicator will be the most objective in determining the rating of the state economy.