Gross Domestic Income - GDI

AAA

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.

RELATED TERMS
  1. Debt-To-GDP Ratio

    The ratio of a country's national debt to its gross domestic ...
  2. Per Capita GDP

    A measure of the total output of a country that takes the gross ...
  3. Gross Domestic Product - GDP

    The monetary value of all the finished goods and services produced ...
  4. GDP Gap

    The forfeited output of a country's economy resulting from the ...
  5. Gross National Product - GNP

    An economic statistic that includes GDP, plus any income earned ...
  6. Net Domestic Product - NDP

    An annual measure of the economic output of a nation that is ...
Related Articles
  1. Understanding Supply-Side Economics
    Economics

    Understanding Supply-Side Economics

  2. Economic Indicators That Do-It-Yourself ...
    Investing Basics

    Economic Indicators That Do-It-Yourself ...

  3. Explaining The World Through Macroeconomic ...
    Options & Futures

    Explaining The World Through Macroeconomic ...

  4. The Importance Of Inflation And GDP
    Economics

    The Importance Of Inflation And GDP

comments powered by Disqus
Hot Definitions
  1. Last In, First Out - LIFO

    An asset-management and valuation method that assumes that assets produced or acquired last are the ones that are used, sold ...
  2. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  3. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  4. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  5. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  6. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
Trading Center