Thursday, March 29, 2012

GDI, The Alternative To GDP, Shows Stronger Recent Economic Growth

From The Wall Street Journal, "GDI: An Alternate Measure Showing Stronger U.S. Growth" by David Wessel:
The Commerce Department has (at least) two ways to measure the growth and size of the overall U.S. economy. One is to add up all the value of all the goods and services produced in the economy in a quarter or a year. That’s the gross domestic product, or GDP. The other is to add up all the income received in the economy, wages and interest and profits and so on. That’s gross domestic income, or GDI.
some economists argue that the GDI may be a more meaningful measure, particularly at turning points in the economy. “Placing an increased focus on GDI may be useful in assessing the current state of the economy,” Federal Reserve Board economist Jeremy J. Nalewaik wrote in a 2006 working paper.

Source: The Wall Street Journal

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