In the wake of the Great Depression, a Russian-American economist named Simon Kuznets popularized the formula for gross domestic product to summarize the health of the economy and provide the American government with a metric to track growth.

There are three different ways to calculate gross domestic product: the expenditure approach, the value-added approach, and the income approach.

'And it can tell us everything about America except why we are proud that we are Americans:' Hear Robert Kennedy's famous 1968 speech criticizing gross domestic product as the primary benchmark for American growth.

Gross domestic product only accounts for consumer spending, investments, government spending, and net exports—meaning factors such as stock market performance, Social Security payments, household labor, and the value of environmental damage largely aren't represented.

Explore a breakdown of the US gross domestic product, including GDP's growth over time, the GDP of individual states, and which industries contribute the most to US GDP.

A list of the world's top 25 economies by GDP

Gross domestic product estimates the value of goods and services produced in a country, typically through the expenditure method, which adds up spending by consumers, investors and governments with the value of exports. The top five economies are the US, China, Germany, Japan and India.

Consumer spending accounts for 70% of America's gross domestic product.

John Maynard Keynes was one of the most influential economists of the 20th century

Keynes influenced economic thought by arguing that governments should spend to stabilize economies during downturns. His ideas shaped the postwar international order and remain central to modern economic policy debates.

There's no single definition of an economic recession, though recessions are commonly identified by two consecutive quarters of shrinking gross domestic product.

Learn how 'real' and 'nominal' gross domestic product differ, with real GDP being adjusted for inflation and nominal GDP reflecting current monetary values.

Ranking the world’s economies: 1980 vs. 2025

The US remains the world’s largest economy, having increased its annual gross domestic product from $2.9T in 1980 to $30.6T in 2025. In 1980, China ranked seventh globally with a GDP of $304B. In 2025, China ranked second with a GDP of $19.4T.

At $159K, Luxembourg has the world's highest GDP per capita (also known as GDP per person) as of June 2026.

After the COVID-19 pandemic, Amsterdam became the first city to apply 'doughnut economics,' a new economic school of thought that defines productivity in terms of environmental impact.

In 2025, the US credit rating was downgraded over concerns about the debt-to-GDP ratio.

Some economists argue that the national debt is not a critical concern.

British economist John Maynard Keynes originally proposed a global currency called the bancor.

In a 'K-shaped' economy, higher earners' spending rises while lower earners' spending stagnates or decreases.

See a breakdown of every state's portion of the entire US gross domestic product.

Explore 'The Big Mac Index,' an economic indicator created by The Economist as a cheeky reference for the purchasing power of consumers across different countries.

Consumer spending accounts for 70% of US GDP, making Black Friday significant

Lizabeth Cohen, a history professor at Harvard and author of the book “A Consumer's Republic: The Politics Of Mass Consumption In Postwar America,” has argued that the US government has presented consumerism as a way out of economic crisis or decline since around World War II.

US state economies compared to entire countries

This map compares US state economies by their gross domestic product to that of a similarly sized country. For instance, California has the largest state economy in the US, with a GDP nearly equal to that of India, the fifth-largest economy in the world. Click here to see how the rest of the states compare.

A recession is commonly defined as two consecutive quarters of shrinking GDP, but in practice, these economic phenomena are more complex.

The Bretton Woods economic order was built on Keynesian principles

Keynesian economics suggests that governments should actively manage economies to prevent downturns, promote employment, and regulate markets. The Bretton Woods institutions were created based on this belief that coordinated public intervention could prevent the economic crises of the 1930s.

Why some nations reach economic success and others don’t

The 2024 Nobel Prize in Economics winners, Daron Acemoglu, Simon Johnson, and James A. Robinson, were honored for their compelling research on the factors that influence a nation’s prosperity. Spanning two decades, their work presents insights into how societal organization can explain the income discrepancies between different countries. In general, their research shows that economic success favors more free and open societies. Listen for more fascinating insights.

Harry Dexter White outmaneuvered Keynes to make the dollar the center of the new global monetary system

The chief US Treasury economist at the conference, White, advocated for a dollar-centered exchange rate system over Keynes' competing idea of a new global currency, shaping the postwar economic order for decades.

One signal that a recession has become a depression? When GDP declines more than 10%

There’s no single definition for recessions or depressions, but both are marked by sustained periods of declining economic activity. Depressions are more severe than recessions.

The Bretton Woods conference in 1944 created the foundations of the modern global economy

In July 1944, 44 nations gathered in Bretton Woods, New Hampshire, to create a new postwar economic order. The conference led to the creation of the IMF and the International Bank for Reconstruction and Development—now known as the World Bank.

Why the US can’t end poverty

Despite being among the wealthiest nations in the world in terms of GDP, the US has a major poverty issue, with more than 37 million Americans living in poverty as of 2023. Part of the issue is that the standards by which the US measures poverty are outdated: The official poverty measure in the US today is based on calculations from the 1960s. Find out more in this video.

Watch Ray Dalio explain how the economy works

Dalio describes the economy as a machine that runs on three main cycles: productivity growth, the short-term debt cycle, and the long-term debt cycle. Dalio says layering these three cycles on top of each other essentially creates a template for understanding changes in the economy.

The global economy runs on US dollars, with nearly 90% of international trade in 2019 being processed in US dollars.

The roughly 11 countries in BRICS, an economic coalition created to counter the G7, collectively hold about 40% of global gross domestic product when adjusted for purchasing power parity.

The Dow remains a shorthand for America’s economic health

For over a century, the Dow Jones Industrial Average has been one of the most closely watched market barometers. Its rises and falls dominate headlines and politics, shaping how Americans perceive the strength of their economy.

The Smoot-Hawley Tariff Act—which was passed during the Great Depression with the goal of reviving domestic industry—is among the most famous pieces of economic legislation in US history.

Tariffs once fueled the US economy, historically serving as a primary source of revenue and a means to protect domestic industries.

Adam Smith’s 'The Wealth of Nations' introduced concepts like division of labor, productivity, and free markets

Published in 1776, "The Wealth of Nations" is an influential economic work that laid the foundation for modern economic theory. Smith argued for limited government intervention and touted the benefits of self-regulating markets.

Some scholars consider the Bretton Woods system one of the best foreign policy decisions in US history

A survey of historians by the Council on Foreign Relations ranked the creation of the Bretton Woods system among the top 10 foreign policy decisions in US history, highlighting its role in establishing postwar stability, prosperity, and decades of economic growth.

Listen to a podcast episode that outlines 250 years of world trade history.

Joel Mokyr won the 2025 Economics Nobel as a historian of scientific ideas

Many Nobel Prizes for Economics go to economists for their sophisticated quantification and large-scale studies and surveys. And while Northwestern's Mokyr has conducted such studies, his published works are more traditional history, where he argues for the significance of ideas to the development of material economics.

The US unemployment rate soared to over 24% during the Great Depression, the highest in recorded history.

Hear Ray Dalio talk about the growth of the Chinese economy

Dalio was an early advocate of US investment in China. While he has previously criticized the authoritarian regime, his criticism of the government has been labeled mild relative to his praise for economic growth and innovation—critics argue that he has minimized human rights violations in the country.

Visualizing the world's wealth in 2019

The world has a net worth of $360T. The U.S. economy continues to dominate given its sheer size, Asia and Europe are not that far behind.

David Ogilvy once worked for the man who created the Gallup Poll

In 1938, when Ogilvy came to the United States, he started working for George Gallup’s Audience Research Institute in New Jersey. He took his learnings with him through the rest of his career, including during World War II, when Ogilvy worked with the Intelligence Service at the British Embassy in Washington.

The clearest sign of a recession is a steady increase in job losses and high unemployment.

See comparisons of different countries' taxation strategies

Taxes are a major revenue source for most countries, and how each government taxes citizens often reflects the country's economy. Developed countries tax at much higher rates than developing ones, and as a country grows its GDP, it also typically grows the proportional percentage of taxes it gains from its citizens.

A centrally planned economy is one where the government—not markets—sets production

This Investopedia article explains how command economies work, which countries have used them, and why even market-based nations like the US sometimes adopt tools such as rationing or price controls during wartime or national emergencies.

An economic evaluation of US tariffs

Most economists agree that the implementation of large-scale tariffs on foreign goods would hurt both the American and global economies. This video from The Wall Street Journal explains the rationale for tariffs as a tool for domestic job creation, but explains why they may hurt the overall economy.

The US dollar became the world's reserve currency, backed by gold, after 44 nations gathered in Bretton Woods, New Hampshire, in 1944 with the intention of rebuilding the global economy.

When consumers think an economic downturn is looming, the 'lipstick index' economic theory argues that sales of more affordable luxury items (such as lipstick) go up.

See a breakdown of how each country contributes to the world's $126T economy.

Communism grew in appeal during the Great Depression

With at least a quarter of the country out of work, some Americans disenchanted with capitalism began looking at alternatives. Watch this five-minute video to learn about communism's growing allure during the Great Depression.

Ray Dalio has argued that American capitalism is broken, citing economic factors like a growing wealth divide

Dalio also points to stalling income growth, weak healthcare systems, and poor educational outcomes when arguing that American capitalism needs serious reform. However, critics point out that Dalio has amassed a large fortune by running the world's largest hedge fund and question whether Dalio really wants economic reform.