Gross National Product (redirected from GNP)

gross national product (GNP), in economics, a quantitative measure of a nation's total economic activity, generally assessed yearly or quarterly. The GNP equals the

gross domestic product plus income earned by domestic residents through foreign investments minus the income earned by foreign investors in the domestic market. Gross domestic product, often confused with GNP, is calculated from the total value of goods and services produced in an economy over a specified period. Since World War II, GNP has been generally regarded as the most important indicator of the status of an economy. In the United States, the economy is considered to be in recession if there are two consecutive quarters of decrease in GNP. Despite the fact that GNP does not allow for inflation, overall value of production, and other factors, it is nevertheless a significant measurement of economic health. In 1995 the International Bank for Reconstruction and Development (World Bank) created a new system for measuring national wealth, based on the value of natural and mineral resources.

Bibliography

See L. C. Thurow and R. L. Heilbroner, Economics Explained (1987); J. Craven, Introduction to Economics (1984).

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gross national product

the total value of all final goods and services produced annually by a nation

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Gross National Product 

an economic index used in bourgeois statistics of some capitalist countries, as well as international economic and statistical organizations; it represents the total value of final goods and services, expressed in market prices. As a rule, gross national product is computed by use (and not by production and distribution) and encompasses the value of the public’s consumption of goods and services, government purchases, capital investments, and the net balance of payments. Evaluation in market prices means that the gross national product incorporates indirect taxes included in the price and excludes state subsidies. The gross national product differs considerably in amount and structure from the gross social product of socialist countries. For example, the gross national product does not include material outlays (raw and other materials, fuel, and so forth) but at the same time does include the sum of nonproduction services. The gross national product is close in size to national income as computed according to the concept of bourgeois statisticians: it exceeds national income by the amount of depreciation of fixed capital and indirect taxes. That is why a comparison of the dynamics and structure of the economies of capitalist countries with the dynamics and structure of socialist countries requires considerable recalculation. In order for gross national product to be comparable with the national income of socialist countries, depreciation and nonproduction services are excluded from gross national product, which usually lowers its amount by about 30 percent.

V. M. KUDROV