A Three definitions of GDP - detailed breakdown

Back to chapter 1: “Three definitions of GDP”

\[\text{Production of private firms}_{\text{at producer prices} }\\ + \text{Production of households and private} \\ \text{non-profit organisations}_{\text{at producer prices}} \\ + \text{Production of the state}_{\text{at production cost}} \\ + \text{Indirect taxes less subsidies}\] \[\mathbf{\text{Gross domestic product}_{\text{at market prices}}}\]

\[ = \]

\[\text{Private consumption} \\ + \text{Government consumption expenditure} \\ + \text{Investment in equipments} \\ + \text{Investment in buildings} \\ + \text{Other investments} \\ + \text{Changes in inventories and net acquisition of valuables} \\ + \text{Exports of goods and services} \\ – \text{Imports of goods and services}\]

\[\mathbf{\text{Gross domestic product}_{\text{at market prices}}}\]

\[ - \text{Indirect taxes} \\ + \text{Subsidies}\] \[ = \] \[\mathbf{\text{Gross domestic product}_{\text{at factor income}}}\]

\[+ \text{Balance of primary income with the rest of the world}\] \[=\mathbf{\text{Gross national income}}\] \[ – \text{Depreciation}\] \[ = \mathbf{\text{Net national income}}\]