A blog post from BEA Director Vipin Arora
Throughout our history, BEA’s statistics have been developed and used for many purposes. Whether to shed light on the flow of goods and services abroad; compare buying power from one metropolitan area to another; or highlight the income available for saving or spending—and much, much more—our statistics are used by people all over the country. That includes data users interested in the nation’s security.
In fact, World War II was an important impetus for the development of our estimates of gross national product, or GNP, which we still produce today. GNP measures the total value of goods and services a country produces, both at home and abroad. How did the war spur development of GNP estimates?
A key challenge in the early 1940s was understanding how spending on the war effort would impact the rest of the economy. Policymakers were interested in the amount of goods and services that would be available to civilian consumers given war expenditures.
Some analysts believed that national income—the featured measure of economic output at the time—was not broad enough to answer that question because it underestimated the total amount of goods and services available for purchase in the U.S. economy. National income, they argued, measured the income earned in production, not the goods and services produced. A more comprehensive measure of the value of goods and services produced was needed.
GNP became that new measure. Not only did this statistic help support wartime planning, but GNP also became BEA’s featured measure of U.S. economic output. It remained the featured measure until 1991, when gross domestic product, or GDP, gained that distinction.