gross national product

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gross national product

(GNP), in economics, a quantitative measure of a nation's total economic activity, generally assessed yearly or quarterly. In estimating the GNP, only the final value of a product is counted (e.g., automobiles, but not the steel that they contain). The three major components of GNP are consumer purchases, private investment (including overseas investment but excluding foreign investment in a nation's economy), and government spending. The GNP is reported quarterly in the United States and was used as a barometer of the nation's economic health from the 1930s, but in 1991 the government switched to emphasizing the gross domestic product (GDP), which is similar but covers only goods and services produced inside a nation's borders. The GDP, which also is reported quarterly, is regarded as a better indicator of the performance of a country's economy and is used as such by most industrialized nations. The U.S. government continues to report the GNP, but about a month after the GDP. Despite the fact that GNP and GDP do not measure the service and government sectors as well as they do manufacturing, and also do not allow for inflation, overall value of production, and other factors, such as the value of the underground economy, they are nevertheless significant measurements of economic health. In the United States, the economy has been considered to be in recession if there are two consecutive quarters of decrease in GNP or GDP. In 1995 the International Bank for Reconstruction and DevelopmentInternational Bank for Reconstruction and Development (IBRD)
(IBRD), independent specialized agency of the United Nations, with headquarters at Washington, D.C.; one of five closely associated development institutions (also including the International Center for Settlement of
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 (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); D. Coyle, G.D.P.: A Brief but Affectionate History (2014).

gross national product (GNP)

(ECONOMICS) the total money value of the final goods and services produced in an economy in any year, including income from overseas property

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

gross national product

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