Gross National Product is one of the main macroeconomic indicators of national accounts system. Some people use it replacing “Gross Domestic Product” term what is wrong. The gross domestic product reflects the total value of all final goods and services produced in the country. The gross national product reflects the total value of the goods produced only by its residents, regardless of their geographic location.
According to the UN Recommendations from 1993, Gross National Product was replaced by Gross National Income. Now this term isn’t used in statistical practice. It exists now only in textbooks on macroeconomics in the early years of publication.
The ratio of GDP and GNP is described by the following formula:
GNP = GDP + Δ, where Δ – the primary income earned by residents abroad.
Experts use the following formula to calculate GNP:
GNP = GDP + Δ, where Δ is the statistical indicator and the GDP can be calculated in 3 different ways:
- End-use calculation method.
- Value-added method (production method).
- By income (distribution method).