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Gross domestic product (GDP) is the standard measure of the value of the goods and services produced by a country during a period. Per capita GDP is a broad indicator of economic living standards.
Each country calculates GDP in its own currency and, in order to compare countries, these estimates have to be converted into a common currency. Often, the conversion is made using exchange rates, but these give a misleading comparison of the real volumes of goods and services in the GDP. Comparisons of real GDP between countries can best be made using purchasing power parities (PPPs) to convert each country's GDP into a common currency. PPPs are currency converters that equalise the purchasing power of the different currencies (see also Rates of conversion).
Definition
What does gross domestic product mean? "Gross" signifies that no deduction has been made for the depreciation of machinery, buildings and other capital products used in production. "Domestic" means that it is production by the resident institutional units of the country. As many products are used to produce other products it is necessary to define production in terms of value added.
GDP can be measured in three different ways: as output less intermediate consumption (i.e. value added) plus taxes less subsidies on products (such as VAT); as the income earned from production by summing employee compensation, the gross operating surplus of enterprises and government, the gross mixed income of unincorporated enterprises and net taxes on production and imports (VAT, payroll tax, import duties, etc, less subsidies); or as the expenditure on the goods and services produced by summing consumption expenditures, gross fixed capital formation, changes in inventories and exports less imports.
Comparability
Virtually all OECD countries now follow the 1993 System of National Accounts. However, since Luxembourg and, to a lesser extent, Switzerland have a relatively large number of frontier workers, their GDP per capita is overstated compared with other countries. Such workers contribute to the GDP but are excluded from the population figures.
For some countries, the latest year has been estimated by the Secretariat. For several countries, the historical data have also been estimated by the OECD; if countries revise their methodologies but only supply revised data for recent years, the historical data have been estimated by mechanically linking the new and old series.
Note that in the tables, the OECD total excludes the Czech Republic, Hungary, Poland and the Slovak Republic.
Long-term trends
In terms of total GDP, the United States is, by far, the largest member country. Japan is the second largest economy followed, at some distance, by the four large EU members - Germany, United Kingdom, France and Italy. The next four are Spain, Mexico, Canada and Korea. These rankings have not changed significantly over the period shown.
Per capita GDP for the OECD as a whole was 31 500 US dollars per head in 2006. Four OECD countries had per capita GDP in excess of 40 000 US dollars - Luxembourg, Norway, United States and Ireland. About half of the 30 OECD members had per capita GDP between 30 000 and 40 000 US dollars, while 12 countries had per capita GDP below 30 000 US dollars. Turkey, Mexico and Poland had the lowest per capita GDP. Note that both GDP and PPPs contain statistical errors, and differences between countries in per capita GDP of 5% or less are not significant.
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Source
Further information
Analytical publications
Statistical publications
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Maddison, Angus (2003), The World Economy: Historical Perspectives, OECD, Paris, also available on CD-ROM, www.theworldeconomy.org.
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OECD, African Development Bank (2007), African Economic Outlook 2006/2007, OECD, Paris, also available on CD-ROM, www.sourceoecd.org/9789264025103.
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OECD (2007), Latin American Economic Outlook 2008, OECD, Paris, also available on CD-ROM, www.sourceoecd.org/9789264038264.
Methodological publications
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OECD (2000), OECD Glossaries, System of National Accounts, 1993 - Glossary, OECD, Paris.
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UN, OECD, IMF, Eurostat (eds.) (1993), System of National Accounts 1993, United Nations, Geneva, http://unstats.un.org/unsd/sna1993.
Online databases
Websites
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| Indicator in PDF |
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| Tables |
| Gross domestic product |
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| GDP per capita |
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| Volume index of GDP per capita |
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| 1.1. Gross domestic product |
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| 1.2. GDP per capita |
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| 1.3. Change in relative volume indices of GDP per capita |
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