areppim: information, pure and simple

Glossary of terms

areppim: information, pure and simple

You are here:   areppim >  Glossary of terms >   GDI - gross domestic income

GDI - Gross Domestic Income

Real gross domestic income (real GDI) measures the purchasing power of the total incomes generated by domestic production (including the impact on those incomes of changes in the terms of trade); it is equal to gross domestic product at constant prices plus the trading gain (or less the trading loss) resulting from changes in the terms of trade [Definition from System of National Accounts, United Nations,].
While GDP (gross domestic product) gauges economic activity on expenditure, GDI measures output as the incomes earned while producing goods and services within a nation's borders. In theory, GDP should equal GDI, but in practice, they differ because their components are estimated using largely independent and imperfect data. This difference is termed the "statistical discrepancy".
GDI can be calculated in two ways:
  1. [ GDI = compensation of employees + gross operating surplus + gross mixed income + taxes - subsidies on production and imports ]

  2. [ GDI = rental income + interest income + profits + wages + statistical adjustments ]

  • Compensation of employees = the total compensation to employees for services rendered.
  • Gross operating surplus, or simply profits = surpluses of incorporated businesses.
  • Gross mixed income = gross operating surplus for unincorporated businesses.
  • Statistical adjustments = may include corporate income tax, dividends and undistributed profits.