Gross domestic product (GDP) is defined as the monetary value of all final goods and services produced within a country during a specific period of time. GDP was first developed by Simon Kuznets in 1934. After the Bretton Woods conference in 1944, it became one the primary indicators of the economic health of a country, as well as its standard of living. GDP is calculated as:
GDP = C + G + I + NX
“C” is equal to all private consumption in a nation’s economy
“G” is the sum of all government spending
“I” is the sum of all the country’s businesses spending on capital
“NX” is the country’s total net exports, calculated as total exports minus total imports.
The U.S. Department of Commerce releases GDP data for the economy on a quarterly basis on the last business day of the next quarter. When the GDP declines for two successive quarters, the economy is said to be in a recession.