what is gross national product gnp 
gross national product gnp is an estimate of the total value of all the final products and services turned out in a given period by the means of production owned by a country s residents 1 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 then subtracting income earned 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 1investopedia eliana rodgersunderstanding gross national product gnp gnp measures the total monetary value of the output produced by a country s residents therefore any output produced by foreign residents within the country s borders must be excluded in calculations of gnp while any output produced by the country s residents outside of its borders must be counted gnp does not include intermediate goods and services to avoid double counting since they are already incorporated in the value of final goods and services the u s used gnp until 1991 as its main measure of economic activity after that point it started to use gdp in its place for two main reasons 2 first gdp corresponds more closely to other u s economic data of interest to policymakers such as employment and industrial production which like gdp measure activity within the boundaries of the u s and ignore nationalities second the switch to gdp was to facilitate cross country comparisons because most other countries at the time primarily used gdp 3the difference between gnp and gdpgnp and gdp are very closely related concepts and the main differences between them come from the fact that there may be companies owned by foreign residents that produce goods in the country and companies owned by domestic residents that produce goods for the rest of the world and revert earned income to domestic residents for example there are a number of foreign companies that produce goods and services in the united states and transfer any income earned to their foreign residents likewise many u s corporations produce goods and services outside of the u s borders and earn profits for u s residents if income earned by domestic corporations outside of the united states exceeds income earned within the united states by corporations owned by foreign residents the u s gnp is higher than its gdp calculating both gnp and gdp can produce different results in terms of total output for example in 2021 according to q3 data u s gdp was 23 8 trillion while its gnp was 23 9 trillion 4while gdp is the most widely followed measure of a country s economic activity gnp is still worth looking at because large differences between gnp and gdp may indicate that a country is becoming more engaged in international trade production or financial operations the larger the difference between a country s gnp and gdp the greater the degree of incomes and investment activity in that country involve transnational activities such as foreign direct investment one way or another 