DEFINITION of 'Gross Domestic Income - GDI'
The sum of all income earned while producing goods and services within a nation's borders. Gross domestic income (GDI) is a lesser-known calculation stat used by the Federal Reserve to gauge economic activity based on income. It differs from gross domestic product (GDP), which gauges economic activity on expenditure.
GDI is calculated as the total income payable in GDP income accounts. It can be calculated in two ways:
1. GDI = compensation of employees + gross operating surplus + gross mixed income + taxes – subsidies on production and imports
Compensation of employees encompasses the total compensation to employees for services rendered. Gross operating surplus, also known as profits, refers to the surpluses of incorporated businesses. Gross mixed income is the same as gross operating surplus, but for unincorporated businesses.
2. GDI = rental income + interest income + profits + wages + statistical adjustments
Statistical adjustments may include corporate income tax, dividends and undistributed profits.
INVESTOPEDIA EXPLAINS 'Gross Domestic Income - GDI'
Theoretically, GDI should equal GDP; however, because GDP is calculated based on expenditure accounts, a difference usually exists. The market value of goods and services consumed often differs, because of measurement errors, from the amount of income earned to produce them.
The ratio of a country's national debt to its gross domestic ...
A measure of the total output of a country that takes the gross ...
An annual measure of the economic output of a nation that is ...
A metric used to measure the economic growth of a country. It ...
The monetary value of all the finished goods and services produced ...
The forfeited output of a country's economy resulting from the ...