Gross domestic product (GDP)

In short: GDP measures the value of all goods and services produced in a country in a year. It is the most important indicator of the size of an economy.

In more detail: It is measured nominally (at current prices) or in real terms (price-adjusted, without inflation). Growth shows whether the economy is getting bigger.

In detail

• Per capita: GDP divided by population compares countries better.
• Origin: Agriculture, industry, services contribute.
• Use: Consumption, investment, government spending, exports minus imports.
• Recession: GDP falls for two quarters in a row.
• Limits: Housework, volunteering and environmental damage are missing; it says little about satisfaction.
• Alternatives: Human Development Index (HDI) or happiness indices.
• Business cycle: Fluctuations of GDP form the business cycle (konjunktur-und-arbeitslosigkeit).