Gross National Product (GNP)

Gross national product (GNP) is an estimate of total value of all the final products and services produced in a given period by the means of production owned by a country’s residents. GNP is commonly calculated by taking the sum of personal consumption expenditures, private domestic investment, government expenditure, net exports, and any income earned by residents from overseas investments, minus income earned within the domestic economy by foreign residents. Net exports represent the difference between what a country exports minus any imports of goods and services.

GNP is related to another important economic measure called gross domestic product (GDP), which takes into account all output produced within a country’s borders regardless of who owns the means of production. GNP starts with GDP, adds residents’ investment income from overseas investments, and subtracts foreign residents’ investment income earned within a country.

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