The components of gross output provide extra insight about the inputs and factor costs of production as well as the transactions between economic sectors.
[5] In his work, The Purchasing Power of Money: Its Determination and Relation to Credit, Interest, and Crises (1911, 1920), Yale professor Irving Fisher introduced a theoretical measure of "volume of trade" with his equation of exchange: MV = PT, where PT measured the "volume of trade" in the economy at a specified time.
Simon Kuznets, a Russian American economist at the University of Pennsylvania, did breakthrough work in the 1930s in measuring national income, "the size of the final net product."
He defined net product as follows: "If all the commodities produced and all the direct services rendered during the year are added to their market value, and from the resulting total we subtract the value of that part of the nation's stock of goods that was expended (both as raw materials and as capital equipment) in producing this total, then the remainder constitutes the net product of the national economy of the year.
Wassily Leontief, a Russian American economist at Harvard University, followed with the development of the first input-output tables, which he regarded as a better survey of the whole economy.
He contends that gross output should be the starting point of national income accounting, and offers a more complete picture of the macro economy.
They include David Colander,[13] followed by a rejoinder by Mark Skousen,[14] Steve Hanke,[15] Gene Epstein[16] and Steve Forbes[17] Skousen has also criticized the BEA's measure of gross output for failing to include a measure of total gross sales at the wholesale and retail level, amounting to more than $7.6 trillion of business spending (B2B) in 2014.