Gross Domestic Income - GDI

What is the '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.

BREAKING DOWN '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.

RELATED TERMS
  1. Gross Income

    1. An individual's total personal income, before accounting for ...
  2. Gross Domestic Product - GDP

    The monetary value of all the finished goods and services produced ...
  3. Adjusted Gross Income - AGI

    A measure of income calculated from your gross income and used ...
  4. Taxable Income

    The amount of income that is used to calculate an individual's ...
  5. Gross Profit

    A company's total revenue (equivalent to total sales) minus the ...
  6. National Income Accounting

    A term used in economics to refer to the bookkeeping system that ...
Related Articles
  1. Taxes

    What is Gross Income?

    Gross income is an individual’s total income before taxes and other adjustments are considered.
  2. Term

    Why Investors and Economists Care About GDP

    Gross Domestic Product is the total dollar value of all goods an economy produces over a given time.
  3. Economics

    How To Calculate The GDP Of A Country

    A nation’s gross domestic product measures the monetary value of all of the goods and services it produces.
  4. Economics

    Macroeconomics: Economic Performance and Growth

    By Stephen Simpson Income is one of the most significant factors in measuring economic performance, and gross domestic product (GDP) is the most commonly used measure of a country's economic ...
  5. Term

    Gross, Operating and Net Profit Margins

    A company’s income statement includes the company’s gross, operating and net profits.
  6. Investing Basics

    How To Value A Real Estate Investment Property

    Two common methods for real estate valuation are the discounted net operating income and gross income multiplier approaches.
  7. Economics

    How Does National Income Accounting Work?

    National income accounting is an economic term describing the system used by a country to gather data and determine aggregate economic activity.
  8. Taxes

    Explaining Taxable Income

    Taxable income is the net of gross income and allowable deductions.
  9. Economics

    How To Calculate The GDP Of A Country

    We explain how to calculate the GDP of a country using two different approaches.
  10. Economics

    Understanding Gross Sales

    Gross sales represents the overall revenue of a company through its sales activities.
RELATED FAQS
  1. What is the difference between gross income and earned income?

    Being able to distinguish between earned income and gross income is an important tool in preparing for and filing your individual ... Read Answer >>
  2. What are the differences between gross profit and net income?

    Find out how companies determine gross profits and net income, and how these figures provide quick snapshots of their financial ... Read Answer >>
  3. What is the difference between operating income and gross profit?

    Learn more about the difference between operating income and gross profit, two accounting figures that appear on a company's ... Read Answer >>
  4. What are the differences among gross income, adjusted gross income and modified adjusted ...

    Discover how calculating total taxable income is easier when gross income, adjusted gross income and modified adjusted gross ... Read Answer >>
  5. What is the difference between gross income and taxable income?

    Understanding common tax terms including gross income and taxable income can help individuals navigate tax accounting in ... Read Answer >>
  6. What is the difference in tax liability between gross income and other kinds of income?

    Find out how the U.S. government taxes worker's earnings, whether it is gross income or income exempted or excluded from ... Read Answer >>
Hot Definitions
  1. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage ...
  2. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  3. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  4. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  5. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  6. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
Trading Center