The Gross Domestic Income (GDI) is the total factor income payment done by all residents within a country. It includes the sum of all wages, profits, and

indirect taxes An indirect tax (such as a sales tax, per unit tax, value-added tax (VAT), excise tax, consumption tax, or tariff) is a tax that is levied upon goods and services before they reach the customer who ultimately pays the indirect tax as a part of ma ...

, minus subsidies. Nominal GDI and Nominal

gross domestic product Gross domestic product (GDP) is a monetary measure of the total market value of all the final goods and services produced and rendered in a specific time period by a country or countries. GDP is often used to measure the economic performanc ...

(GDP) are exactly identical, yet real GDI and

real gross domestic product Real gross domestic product (real GDP) is a macroeconomic measure of the value of economic output adjusted for price changes (i.e. inflation or deflation). This adjustment transforms the money-value measure, nominal GDP, into an index for quantit ...

(Real GDP) are different; real GDP is calculated by keeping the price of each domestic production constant between two years, while real GDI is calculated by deflating GDP with the

purchasing power Purchasing power refers to the amount of products and services available for purchase with a certain currency unit. For example, if you took one unit of cash to a store in the 1950s, you could buy more products than you could now, showing that th ...

of money. As such, real GDI introduces a trade balance term; real GDI increases when the price of imports goes down or when the price of exports goes up, while real GDP is not affected. For oil-export-dependent economies, there could be substantial differences between real GDP and real GDI, due the effect of

oil price The price of oil, or the oil price, generally refers to the spot price of a Oil barrel, barrel () of benchmark crude oil—a reference price for buyers and sellers of crude oil such as West Texas Intermediate (WTI), Brent Crude, Dubai Crud ...

volatility on the purchasing power in those countries. In the United States National Income and product accounts, the word GDI is used to define GDP calculated with income data rather than expenditure data. The difference between the two figure is known as a statistical discrepancy.

External links

*Nalewaik, Jeremy J.
"The Income- and Expenditure-Side Estimates of U.S. Output Growth"
(2010).

References

{{reflist National accounts Gross domestic product