What is GDP? Here's what it means, how it has grown in the US, and what lies ahead.

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Gross domestic product, or GDP, is one of the most common measures of the size and health of an economy.

GDP represents the total amount of money a country earns from the goods and services it produces over a certain period — usually a year. Measuring GDP is like going to your doctor for an annual physical: It helps you keep track of a nation's economic health over time.

While there are three ways of measuring GDP, they all should theoretically result in a similar number and show the size of national spending, output and income.

One GDP equation is as follows:

GDP = private spending + government spending + a country's investments + total net exports

Looking at government data and figures published by the World Bank going back 50 years, you can see just how much the United States economy has grown over the decades:

1966: $815 billion
1976: $1.8 trillion
1986: $4.5 trillion
1996: $8.1 trillion
2006: $13.8 trillion
2016: $18.5 trillion

And, as you can see in the chart below, GDP growth has been fairly steady year after year — with the exception of 2009, the trough of the Great Recession.

Source: Graphiq

How would a Donald Trump administration impact the GDP?

Several economists estimate that a Donald Trump presidency would be bad for long-term GDP growth and the economy.

For example, a new analysis from the Penn Wharton Budget Model found that in the short-term, Trump's policies would likely raise the GDP by 1.1% by 2018 — but by 2027, the gains would essentially be erased, and the GDP would be 0.43%, which is lower than it would be if we just kept policy as it is currently.

Even incremental changes to the GDP can have a big impact on employment: By 2040, the researchers found, the U.S. would lose out on some 11 million jobs under Trump's plan.

Citigroup chief economist Willem Buiter has suggested that if Trump were to win, his economic policies might even trigger another recession.

"A Trump victory could lower global GDP growth by around 0.7-0.8 percentage points," Buiter warned in August, according to Bloomberg Markets.

Senior policy advisors to the Trump campaign have released their own report, detailing how their candidate's policies would boost revenues — which are part of the GDP. 

Republican presidential candidate Donald Trump speaks at a rally in Colorado Tuesday.Source: Brennan Linsley/AP
Republican presidential candidate Donald Trump speaks at a rally in Colorado Tuesday.  Brennan Linsley/AP

How would a Hillary Clinton administration impact the GDP?

As for Democratic presidential nominee Hillary Clinton, there's a pretty wide consensus among economists that her proposed policies would be better for the economy than Trump's.

An August Wall Street Journal poll of former members of the White House Council of Economic Advisers didn't identify a single Trump supporter, despite going back through eight presidencies. 

In a report evaluating Clinton's economic policies, Moody's Analytics forecasts her presidency could result in a 2.7% GDP growth rate, slightly higher than current projections of 2.3%. 

Democratic presidential candidate Hillary Clinton speaks at a campaign rally in Florida on Oct. 11. Source: Joe Raedle/Getty Images
Democratic presidential candidate Hillary Clinton speaks at a campaign rally in Florida on Oct. 11.  Joe Raedle/Getty Images

Wharton's estimates were more modest. They projected Clinton's policies would likely contract GDP for a couple years, before helping it expand: By 2027, Clinton's policies would add 0.4% to GDP, they found.

Of course, GDP is only one way to measure the health of an economy, and a potentially flawed one, at that; many criticize GDP as outmoded because, among other shortcomings, it doesn't address long-term environmental costs.