GDP Calculator
Calculate Gross Domestic Product (GDP) using Expenditure and Income approaches. Includes Per Capita analysis and economic visualizations.
Net Exports
Total GDP: $0
Per Capita: $0
About
Gross Domestic Product (GDP) is the definitive indicator of an economy's size and health. Accurate calculation of GDP is essential for government policy formulation, investment strategy, and international economic comparison. This tool computes GDP using the two primary methodologies: the Expenditure Approach (calculating total spending) and the Income Approach (calculating total earnings). It also normalizes the data against population to derive GDP Per Capita, a more accurate metric for standard of living analysis.
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economics
finance
expenditure approach
income approach
Formulas
The standard Expenditure Approach formula is:
Y = C + I + G + (X − M)
Where:
- C: Consumption
- I: Investment
- G: Government Spending
- X: Exports, M: Imports
Reference Data
| Economic Component | Typical % of GDP (Developed) | Description |
|---|---|---|
| Consumption (C) | 60-70% | Household goods, services, healthcare. |
| Investment (I) | 15-25% | Business capital, residential housing, inventories. |
| Government (G) | 15-20% | Infrastructure, defense, salaries (excludes transfers). |
| Net Exports (X-M) | ±5% | Trade balance. Positive = Surplus, Negative = Deficit. |
| GDP Per Capita | N/A | Indicator of individual prosperity. |
| Shadow Economy | 8-15% | Unrecorded economic activity (not in official GDP). |
| Depreciation | 10-12% | Capital consumption allowance (Gross vs Net). |
| Indirect Taxes | 5-10% | VAT/Sales tax included in market prices. |
Frequently Asked Questions
Transfer payments, such as social security or unemployment benefits, are excluded because they do not represent the purchase of a new good or service. Including them would result in double-counting when the recipient spends that money on consumption.
Nominal GDP is calculated using current market prices, making it susceptible to inflation. Real GDP is adjusted for inflation (using a deflator), providing a true reflection of output volume changes rather than price changes.
A trade deficit (Imports > Exports) mathematically reduces the GDP figure. However, it is not inherently negative for the economy; it often indicates strong domestic consumption and foreign investment inflow.
No. GDP measures economic activity. It does not account for income inequality, environmental degradation, leisure time, or non-market domestic work, making it an imperfect proxy for societal welfare.