Gross Domestic Product and Gross National Product
1
Definitions
The Gross Domestic Product (GDP) can be defined as "the market value of all final goods
and services produced within a country in a given period of time"1, whereas the Gross
National Product (GNP) measures the market value produced by factors of production
owned by permanent residents of a country2, produced either within the country or abroad.
2
The components of GDP and GNP - with numbers
US, 2012, Billions of $3
11'121
2'059
3'063
- 561
15'682
240
15'922
Components
Consumption (C)
Investment (I)
Government purchases (G)
Net exports (NX)
Gross Domestic Product (GDP)
Net income from abroad
Gross National Product (GNP)
3
The components of GDP and GNP - in a nutshell
I
G
NX
GNP
GDP
C
Net income
from abroad*
* If, however, net income from abroad is negative, then GDP > GNP.
1
2
3
Mankiw Gregory N.: Principles of Economics, 3rd ed., 2004, p. 502
do, p. 504
Board of Governors of the Federal Reserve System, Washington DC 20551: Flow of
Funds Accounts of the United States, 4th Quarter 2012, F.6, p. 20
GDPVSGNP.DOC
18th March 2013