Gross national product

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Gross national product (GNP) is the market value of all the products and services produced in one year by labor and property supplied by the citizens of a country. Unlike Gross Domestic Product (GDP), which defines production based on the geographical location of production, GNP allocates production based on ownership.

GNP does not distinguish between qualitative improvements in the state of the technical arts (e.g., increasing computer processing speeds), and quantitative increases in goods (e.g., number of computers produced), and considers both to be forms of "economic growth".1

Basically, GNP is the total value of all final goods and services produced within a country in a particular year, plus income earned by its citizens (including income of those located abroad)(no need to minus income of non resident as income includes of only its citizen). GNP measures the value of goods and services that the country's citizens produced regardless of their location. GNP is one measure of the economic condition of a country, under the assumption that a higher GNP leads to a higher quality of living, all other things being equal.

GNP vs. GDP

Gross National Product (GNP) is often contrasted with Gross Domestic Product (GDP). While GNP measures the output generated by a country's enterprises (whether physically located domestically or abroad) GDP measures the total output produced within a country's borders - whether produced by that country's own local firms or by foreign firms.

When a country's capital or labour resources are employed outside its borders, or when a foreign firm is operating in its territory, GDP and GNP can produce different measures of total output. In 2009 for instance, the United States estimated its GDP at $14.119 trillion, and its GNP at $14.265 trillion.2

Use

The United States used GNP as its primary measure of total economic activity before 1991, when it began to use GDP.

3 In making the switch, the Bureau of Economic Analysis (BEA) noted both that GDP provided an easier comparison of other measures of economic activity in the United States and that "virtually all other countries have already adopted GDP as their primary measure of production."4

List of countries by GNP (GNI) (nominal, Atlas method) (millions of 2012 US$)5 (Top 10)

Rank 2011 2010 2009
1  United States 15,567,567
2  China 6,628,086  China 5,717,592  China 4,822,913
3  Japan 5,774,376  Japan 5,359,236  Japan 4,793,538
4  Germany 3,594,303  Germany 3,513,807  Germany 3,472,823
5  France 2,775,664  France 2,745,670  France 2,742,735
6  United Kingdom 2,366,544  United Kingdom 2,373,636  United Kingdom 2,532,124
7  Italy 2,246,998  Italy 2,149,222  Italy 2,141,109
8  Brazil 2,107,628  Brazil 1,859,414  Brazil 1,575,897
9  India 1,746,481  India 1,539,419  Spain 1,469,901
10  Canada 1,570,886  Canada 1,475,865  Canada 1,412,899

GNP Growth

GNP Growth
2008 2009 2010 2011
 USA - 0.14% Decline - 4.49% Decline + 4.16% Growth + 1.87% Growth

Source: Helgi Library,6 World Bank

GNP Growth
2008 2009 2010 2011
 United Kingdom - 0.10% Decline - 4.81% Decline + 1.42% Growth + 0.90% Growth

Source: Helgi Library,6 World Bank

See also

References

  1. ^ Daly, Herman E. (1996), Beyond Growth. Beacon Press
  2. ^ "Flow of Funds Accounts of the United States" (PDF). Board of Governors of the Federal Reserve System. 17 September 2010. p. 9. 
  3. ^ "BEA: Glossary "G"". Bureau of Economic Analysis. 5 September 2007. 
  4. ^ "Gross Domestic Product as a Measure of U.S. Production" (PDF). August 1991. 
  5. ^ GNI, Atlas method
  6. ^ a b | http://helgilibrary.com/indicators/index/gni-growth | 2014-02-11

Sources

  • Christian Leipert (March, 1987) "A Critical Appraisal of Gross National Product: The Measurement of Net National Welfare and Environmental Accounting". Journal of Economic Issues, Vol. 21, No. 1, pp. 357–373
  • England, RW "Alternatives to Gross National Product: A Critical Survey", in Human Wellbeing and Economic Goals (Island Press, 1998)

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