What Was the U.S. GDP Then?
Gross Domestic Product (GDP) is the market value of all final goods and services produced within a country during a given time period. There are two measures of GDP:
- Nominal GDP is the value of production at current market prices, here measured in millions of US Dollars.
- Real GDP is the value of production using a given base year prices, here presented at constant (2017) market prices measured in millions of US Dollars.
The GDP Deflator is the price index used to measure changes in the overall level of prices for the goods and services that make up GDP. It is simply 100 times the ratio of nominal to real GDP.
GDP per capita is calculated by dividing either nominal or real GDP for a given year by the population in that year. These numbers can be thought of as the average share of output per person.
The series presented here are from two sources. From 1929 to the present they are from the U.S. Bureau of Economic Analysis (BEA) - and that is available from their website BEA.gov. These series are linked backward to data from 1790 to 1929 constructed by Louis Johnston and Samuel H Williamson.
1929 to Present
The BEA provides excellent publications on what the GDP is and how it is constructed.
1. The Making of GDP is a simple one pager that summarizes the making of the GDP.
2. Measuring the Economy: A Primer on GDP and the National Income and Product Accounts is a 20 page paper that “introduces new users to the basics of the U.S. national income and product accounts (NIPAs).
3. Concepts and Methods of the U.S. National Income and Product Accounts is a 454 page inclusive document for those who want to know everything about the GDP. From fundamental concepts, definitions, classifications, and accounting framework that underlie the (NIPAs), to the general sources and methods that are used. It continues with separate chapters that describe the sources and methods that are used to prepare the expenditure and income components of the accounts.
Chapter three is useful as it describes why there are four vintages of estimates. For annual data there is the early annual, first annual, second annual, and third annual estimates released by the BEA each year. We only update this annual series with the third estimate that this year is released in the last week of July.now.We wait for the third estimate to update the previous year GDP data because those observations will be consistent over time for users who are citing these data for publications and use them in computations that others may want to reproduce. (Note that the GDP used in the computations of the Purchasing Power Today comparator are the exception in that it uses the latest estimates from the day of publication.)
1790 to 1928
In 1932, the U.S. Senate directed the Department of Commerce to "report estimates of the total national income of the United States." The work was assigned to the Bureau of Foreign and Domestic Commerce; but, by the end of 1932, arrangements were made with the National Bureau of Economic Research (NBER) for Simon Kuznets to assume direction of the study and he and his team completed the report in late 1933 and it was published in U.S. Congress (1934). This report was where the concept was perfected into its current form and Kuznets received the Nobel Prize in Economic Science in 1971 in part for this achievement.
The Commerce Department starting in 1942 began using a methodology that differed from Kuznets in its treatment of government expenditures. Kuznets felt that the activities of the government are an intermediate service and should not be included in final output. Commerce argued that all final production and spending must be counted; and that by subsuming government spending as an intermediate good, one missed an important sector of economic activity in a modern economy.
There have been several studies that have made estimates of US GDP in the pre 1929 period. Kuznets and his student Robert Gallman were the most important researchers. Others include John W. Kendrick, Stanley Lebergott, Thomas S. Berry, Christina D. Romer, Nathan S. Balke and Robert J. Gordon, Thomas Weiss, Paul David, John J. McCusker, and Richard Sutch.
In 2006, we published our series for US GDP from 1790 to 1929 linked to the BEA series to the current year. It was first on EH.Net and then MeasuringWorth when the EH.Net data sets were moved there. This link below presents 38 pages of Excel sheets showing how the data were constructed. There are 25 pages presenting the sources and 11 pages the construction computations. It is followed by descriptions.
Construction of GDP 1790 to 1928
Citation
Samuel H. Williamson, "What Was the U.S. GDP Then?" MeasuringWorth,
