Gross National Product
Gross national product (GNP) is a measure of the total market value of all final goods and services produced by a country's residents and businesses, regardless of where in the world they are located, over a given period of time. It differs from gross domestic product (GDP) in that GNP is defined by ownership (nationality) rather than geography.[1]
GNP = GDP + Net income from abroad
Net income from abroad is the difference between income earned by a country's residents from foreign sources and income earned by foreign residents from within that country.[2]
Definition
Gross national product measures the output attributable to a nation's residents. Because it counts production by nationality, GNP includes the profits, dividends, and wages earned by a country's citizens and firms overseas, while excluding the income earned within the country by foreign-owned firms and workers.[1]
The closely related concept of gross national income (GNI), formerly called GNP, is defined as GDP plus net receipts of primary income from abroad. In practice, many statistical agencies now report GNI in place of GNP, and the two are often used interchangeably.[2]
GNP versus GDP
| Concept | Basis | Description |
|---|---|---|
| Gross domestic product (GDP) | Geography | Output produced within a country's borders, regardless of ownership. |
| Gross national product (GNP) | Ownership | Output produced by a country's residents, regardless of location. |
GNP is the preferred measure for countries whose residents own substantial assets abroad, such as large capital-exporting nations, because it captures the income those assets generate. GDP is preferred for measuring the level of production and employment occurring inside a country.[2]