Gross National Product (GNP)

Financial Dictionary -> General Finance -> Gross National Product (GNP)

In economics, where Gross Domestic Product (GDP) only counts net imports and exports in its formula, Gross National Product (abbreviated GNP) also includes net foreign income. Both methods are often used together to get a clearer picture.

Basically GNP is a measurement that monitors the overall income and output of the country. It is a way to interpret the overall prosperity of the economy and is calculated on an annual basis, often with quarterly updates. More specifically it is the total value in US dollar form of all the goods and services made or attributed to the United States in the given year. The fluctuation in Gross National Product allows for the measurement of the economy based on the output within the nation.

GNP is often considered the better calculation out of GNP and GDP because it also includes income earned by United States citizens working and operating in foreign countries, minus income earned by foreigners in the United States, giving a more accurate account of what money is actually coming in to and being spent in the United States economy only, ignoring where the money is actually being made. For example touring events like pro wrestling spend a good number of days overseas each year, but generally do not contribute any of the income to the overseas economy because their home base is in the US.

Gross National Product includes the allowances made for depreciation and indirect business tax, like those on sale and real estate.
The higher the GNP, theoretically the higher the quality of living is in the country and the more stable the economy.

There are various other formulas that go alongside calculating Gross National Product; these may include economic measurements like:
Gross National Income (GNI), Net National Product (NNP), and Net National Income (NNI).