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Gross Output
 
 
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Gross Output is an economic concept used in national accounts
National accounts

National accounts or national account systems provide a complete and consistent conceptual framework for measuring the economic activity of a nation ....
 such as the United Nations System of National Accounts (UNSNA) and the US National Income and Product Accounts (NIPA
Nipa

* Nipa or nipah is a palm that grows in the mangrove of Southeast Asia.* Nipa is also a grass native to the Sonoran desert in Western Mexico with potential grain qualities....
). It is equal to the value of net output or GDP (also known as gross value added
Value added

Value added refers to the additional value of a commodity over the cost of commodities used to produce it from the previous stage of production....
) plus intermediate consumption
Intermediate consumption

Intermediate consumption is an economic concept used in national accounts, such as the United Nations System of National Accounts and the US National Income and Product Accounts ....
.

Gross Output represents, roughly speaking, the total value of sales by producing enterprises in an accounting period (e.g. a quarter or a year), before subtracting the value of intermediate goods used up in production.






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Gross Output is an economic concept used in national accounts
National accounts

National accounts or national account systems provide a complete and consistent conceptual framework for measuring the economic activity of a nation ....
 such as the United Nations System of National Accounts (UNSNA) and the US National Income and Product Accounts (NIPA
Nipa

* Nipa or nipah is a palm that grows in the mangrove of Southeast Asia.* Nipa is also a grass native to the Sonoran desert in Western Mexico with potential grain qualities....
). It is equal to the value of net output or GDP (also known as gross value added
Value added

Value added refers to the additional value of a commodity over the cost of commodities used to produce it from the previous stage of production....
) plus intermediate consumption
Intermediate consumption

Intermediate consumption is an economic concept used in national accounts, such as the United Nations System of National Accounts and the US National Income and Product Accounts ....
.

Gross Output represents, roughly speaking, the total value of sales by producing enterprises in an accounting period (e.g. a quarter or a year), before subtracting the value of intermediate goods used up in production. This description is not quite accurate though, among other things because flows relating to government services and households are also included.

To obtain a measure of gross value added
Value added

Value added refers to the additional value of a commodity over the cost of commodities used to produce it from the previous stage of production....
 or Net output
Net output

Net output is an accounting concept used in national accounts such as the United Nations System of National Accounts and the NIPAs, and sometimes in corporate or government accounts....
, the value of intermediate goods and services
Intermediate consumption

Intermediate consumption is an economic concept used in national accounts, such as the United Nations System of National Accounts and the US National Income and Product Accounts ....
 must be subtracted from Gross Output. Net value added is obtained by additionally subtracting consumption of fixed capital
Consumption of fixed capital

Consumption of fixed capital is a term used in business accounts, tax assessments and national accounts for depreciation of fixed assets. CFC is used in preference to "depreciation" to emphasize that fixed capital is used up in the process of generating new output; CFC may include other costs incurred in using fixed assets beyond actual depr...
 (depreciation
Depreciation

Depreciation is a term used in accounting, economics and finance to spread the cost of an asset over the span of several years.In simple words we can say that depreciation is the reduction in the value of an asset due to usage, passage of time, wear and tear, technological outdating or obsolescence, depletion, inadequacy, rot, rust, decay o...
).

The statistical definition of Gross Output is dependent upon the definition of production
Production, costs, and pricing

In microeconomics, industrial organization is the field which describes the behavior of firms in the marketplace with regard to production, pricing, employment and other decisions....
 applied. Typically some economic flows
Stock and flow

Economics, business, accounting, and related fields often distinguish between quantities which are stocks and those which are flows. A stock variable is measured at one specific time, and represents a quantity existing at that point in time, which may have been capital accumulation in the past....
 and activities are excluded from coverage in calculating the value of Gross Output, on the ground that they are unrelated to production in the domestic economy. These include foreign transactions, property income, transfers, land sales, and various government disbursements, unpaid housework and voluntary work. On the other hand, items are included which some economists would regard as spurious, such as the imputed rental value of owner-occupied housing (this is the average rents, at market rates, which owners of residential housing would receive if they rented out the housing they occupy).

In the UNSNA standard "product account", Gross Output is the largest aggregate, and it is shown how GDP is derived from it via subtracting intermediate consumption
Intermediate consumption

Intermediate consumption is an economic concept used in national accounts, such as the United Nations System of National Accounts and the US National Income and Product Accounts ....
. However, in the American NIPA
Nipa

* Nipa or nipah is a palm that grows in the mangrove of Southeast Asia.* Nipa is also a grass native to the Sonoran desert in Western Mexico with potential grain qualities....
 system, no annual totals for gross output and intermediate consumption are shown, the focus being on GDP and its components only - gross output and intermediate consumption are cited only in the input-output tables compiled for intermittent years. Thus, to find annual data for gross output and intermediate consumption of the United States, one needs to refer to UNSNA data sets.

See also

  • GDP
  • Intermediate consumption
    Intermediate consumption

    Intermediate consumption is an economic concept used in national accounts, such as the United Nations System of National Accounts and the US National Income and Product Accounts ....
  • Net output
    Net output

    Net output is an accounting concept used in national accounts such as the United Nations System of National Accounts and the NIPAs, and sometimes in corporate or government accounts....
  • United Nations System of National Accounts (UNSNA)
  • National accounts
    National accounts

    National accounts or national account systems provide a complete and consistent conceptual framework for measuring the economic activity of a nation ....