What is GDP?

young-gun · 6 October 2011

Can someone please give me a detailed run-down of exactly what gross domestic product is, how the value is obtained, what relation it has to an economy, why it is so important, and exactly what it's an indicator of. Also if someone could give me examples of good and bad gdp and maybe some current levels. I read about it everywhere and understand its very important but i just dont have a good understanding of the ins and outs of it.

Thanks in advance.

Tysonboss1 · 6 October 2011

Re: GDP???

young-gun said:
Can someone please give me a detailed run-down of exactly what gross domestic product is, how the value is obtained, what relation it has to an economy, why it is so important, and exactly what it's an indicator of. Also if someone could give me examples of good and bad gdp and maybe some current levels. I read about it everywhere and understand its very important but i just dont have a good understanding of the ins and outs of it.

Thanks in advance.

Can't you just research it yourself, and then if you have an opinion on it or have an interesting discussion idea then start a thread.

McLovin · 6 October 2011

Re: GDP???

Tysonboss1 said:
Can't you just research it yourself, and then if you are an opinion on it or have an interesting discussion idea then start a thread.

Agree, this isn't year 11 eco.

Maybe start here...

young-gun · 6 October 2011

Re: GDP???

Tysonboss1 said:
Can't you just research it yourself, and then if you have an opinion on it or have an interesting discussion idea then start a thread.

Ohhhhh I'm sorry. And here I was thinking I was in the beginners section! My apologies. Perhaps in future you can make me aware that my question may not be the best, and direct me to a good website that I can research myself, as opposed to posting useless comments and trying to make others out to be stupid. Not all of us are as educated as yourself.

Thanks for your help champ

skc · 6 October 2011

Re: GDP???

young-gun said:
Ohhhhh I'm sorry. And here I was thinking I was in the beginners section! My apologies. Perhaps in future you can make me aware that my question may not be the best, and direct me to a good website that I can research myself, as opposed to posting useless comments and trying to make others out to be stupid. Not all of us are as educated as yourself.

Thanks for your help champ

Lol. The way you questioned deserves the answers you received.

JFGI.

explod · 6 October 2011

Re: GDP???

GDP can be determined in three ways, all of which should, in principle, give the same result. They are the product (or output) approach, the income approach, and the expenditure approach.

The most direct of the three is the product approach, which sums the outputs of every class of enterprise to arrive at the total. The expenditure approach works on the principle that all of the product must be bought by somebody, therefore the value of the total product must be equal to people's total expenditures in buying things. The income approach works on the principle that the incomes of the productive factors ("producers," colloquially) must be equal to the value of their product, and determines GDP by finding the sum of all producers' incomes

The above from Wikipedia, but too simplistic so you do need to dig deeper. There was a good article about a week back on the current elements of GDP caculations but for the life of me cannot back track it. Perhaps someone else saw it too.

The article in short points out that the GDP numbers being put out now, as with the inflation rates, are well out of whack with reality. Will keep sifting and hopefully get you a reference.

I consider your question important in today climate so good on you for putting it up.

jaystar86 · 6 October 2011

Re: GDP???

Welcome to the real world, where things don't get handed to you on a platter and you need to work to achieve any sort of semblance of results.

young-gun · 6 October 2011

Thanks explod.. I know my question may not have been the clearest but your response was the sort I was after. And to jay..If your not interested in lending some obviously simple advice that you clearly have then why reply with what you did? Last time I helped someone im fairly sure it didn't hurt me.

I'll go and research now and hopefully I can bring something to the forum that meets your post-able requirements.

robusta · 6 October 2011

Maybe it stands for a 'Geriatric Distainful Post'

barney · 6 October 2011

young-gun said:
Thanks explod.. I know my question may not have been the clearest but your response was the sort I was after. And to jay..If your not interested in lending some obviously simple advice that you clearly have then why reply with what you did? Last time I helped someone im fairly sure it didn't hurt me.

I'll go and research now and hopefully I can bring something to the forum that meets your post-able requirements.

Don't be too concerned YG ..... The pecking order on ASF becomes quite bearable once you work out which posters are bona fide Roosters .... and which ones are old Boilers: ..........

Occasionally you will find a Rooster who can also lay eggs .... few and far between, but definitely worth listening to

Cheers ... and welcome to ASF.

ps My post was not directed at any chickens in particular!!

skc · 6 October 2011

young-gun said:
Thanks explod.. I know my question may not have been the clearest but your response was the sort I was after. And to jay..If your not interested in lending some obviously simple advice that you clearly have then why reply with what you did? Last time I helped someone im fairly sure it didn't hurt me.

I'll go and research now and hopefully I can bring something to the forum that meets your post-able requirements.

This is pretty good simple advice imo.

jaystar86 said:
Welcome to the real world, where things don't get handed to you on a platter and you need to work to achieve any sort of semblance of results.

McLovin · 6 October 2011

skc said:
This is pretty good simple advice imo.

+1

Everyone else has to learn these sort of things and you'll get a far better understanding by researching it yourself not just being spoon-fed.

young-gun · 6 October 2011

Re: GDP???

jaystar86 said:
Welcome to the real world, where things don't get handed to you on a platter and you need to work to achieve any sort of semblance of results.

Sorry jay thought you were a different poster

young-gun · 6 October 2011

McLovin said:
+1

Everyone else has to learn these sort of things and you'll get a far better understanding by researching it yourself not just being spoon-fed.

I didn't post with the intention of getting barraged with lectures. I read plenty and Im sorry everyone is interpreting my questions this way. The basis of my post was to either have someone give me their own description of it, or to perhaps point me in a direction where I can learn more about it.

McLovin · 6 October 2011

young-gun said:
I didn't post with the intention of getting barraged with lectures. I read plenty and Im sorry everyone is interpreting my questions this way. The basis of my post was to either have someone give me their own description of it, or to perhaps point me in a direction where I can learn more about it.

OK, so what have you read about it that you don't understand? Or put another way, what do you understand it to be?

explod · 6 October 2011

Re: GDP???

jaystar86 said:
Welcome to the real world, where things don't get handed to you on a platter and you need to work to achieve any sort of semblance of results.

The idea of a site like ASF is to help and to in fact hand the platter around otherwise what would be the point.

I have asked and proferred some rediculous things over the years on ASF and still do. However with many others I have got to know we are all the richer in knowledge, spirit and our equity base.

So, and not just you in isolation jaystar86, but I think many of the newbies ought to be a bit more tolerant and flexible towards each other.

A stupid answer to what is considered a stupid question is also stupid

Billyb · 6 October 2011

Re: GDP???

Yep. Someone offers you the opportunity to open your heart and help them and instead you attack like a shark. Hate to live in the same house as some of these grumps.

young-gun · 6 October 2011

McLovin said:
OK, so what have you read about it that you don't understand? Or put another way, what do you understand it to be?

I'm struggling to post off my phone, but in a nutshell my understanding of GDP is that it's a general gauge of economic growth. I understand that it's obtained several different ways which should all arrive at the same figure.. But I don't understand how they calculate it? As in do they keep a record of everyone's spending? Or do businesses have an obligation to hand over figures to whoever it is in charge of working it out? I just like to know in depth about what I'm reading but most sites only give a brief GDP description. I may be wanting to know more than I need to about this topic.

McLovin · 6 October 2011

young-gun said:
I'm struggling to post off my phone, but in a nutshell my understanding of GDP is that it's a general gauge of economic growth. I understand that it's obtained several different ways which should all arrive at the same figure.. But I don't understand how they calculate it? As in do they keep a record of everyone's spending? Or do businesses have an obligation to hand over figures to whoever it is in charge of working it out? I just like to know in depth about what I'm reading but most sites only give a brief GDP description. I may be wanting to know more than I need to about this topic.

Ahh OK, that's much better.

GDP is the value of everything a country produces and the change in that number being "economic growth". As you said there are three different methods (production, income, expenditure) of measuring and they should all arrive at the same number, but because of the estimation involved they usually won't. You don't really need to know how the three arrive at a GDP number.

Essentially the ABS estimates the number by surveying thousands of large businesses, which is why it's prone to revision. They might also use things like BAS reciepts.

There's a bit here about how they do it:
http://www.abs.gov.au/Ausstats/abs@...Notes&prodno=5206.0&issue=Jun 2011&num=&view=

effraye · 6 October 2011

young-gun said:
Can someone please give me a detailed run-down of exactly what gross domestic product is, how the value is obtained, what relation it has to an economy, why it is so important, and exactly what it's an indicator of. Also if someone could give me examples of good and bad gdp and maybe some current levels. I read about it everywhere and understand its very important but i just dont have a good understanding of the ins and outs of it.

Thanks in advance.

GDP is the gross value (not volume) of production within an economy. Used to be called Gross National Product...

What is GDP?

young-gun

Tysonboss1

McLovin

young-gun

skc

Goldmember

explod

explod

jaystar86

young-gun

robusta

barney

skc

Goldmember

McLovin

young-gun

young-gun

McLovin

explod

explod

Billyb

young-gun

McLovin

effraye

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