GNP (Gross National Product) Definition
The Gross National Product definition is the approximation of the total value of all goods and services produced by a country’s citizens and citizen-owned businesses.
Gross National Product is closely related to Gross Domestic Product, or GDP.
However, GDP is a measure of all production activity within the borders of a country, whereas GNP is a measurement of all production activity by a country’s citizens and domestic-owned businesses.
For example, the United States’ GNP takes into account American owned businesses operating in other countries, and excludes foreign owned businesses operating within US borders.
What is GNP?
GNP is commonly calculated by adding up the following:
- Total personal consumption expenditures (PCE)
- Gross private domestic investment (GDPI)
- Total government expenditures
- Net exports (total value of exports minus total value of imports)
- Total income earned by citizens from overseas investments
- Subtract domestic income earned by foreign residents
A large difference between GDP and GNP can indicate a strong involvement with international trade, production, or financial operation.