Simon Kuznets developed the modern concept of gross domestic product in the 1930s.
Kuznets prepared a landmark report on U.S. national income for Congress in 1934, during the Great Depression. His work organized economic activity into a national accounting framework, helping policymakers measure production and income across the economy.
The term GDP became widely used later, especially during and after World War II. GDP measures the market value of final goods and services produced within a country’s borders during a specified period. It differs from gross national income, which focuses on income earned by a country’s residents and businesses, wherever production occurs.
A common mix-up is crediting GDP entirely to John Maynard Keynes. Keynes strongly influenced the use of national accounting for economic policy, but Kuznets was the key early developer of the production-and-income measurement system. GDP is useful, but it does not directly measure inequality, unpaid household work, or overall well-being.