GDP and GNP. Gross national product and gross domestic product. Concepts of GDP, GNP, ND, NB. The ratio of GDP and GNP and methods for calculating them Gross national product for the year

The economy of any country is part of the world economy, and many firms invest their capital in foreign enterprises.

These investments bring them a certain income. Households can use their savings to purchase shares or bonds not only of national, but also of foreign firms that operate in their country. From these stocks and bonds they also receive some amount of income. Finally, specialists from a given country often work in branches of their companies or in joint ventures abroad. There they receive wages. At the same time, foreign firms invest their capital in enterprises of a given country, citizens of other countries buy securities that are issued by firms of a given country, and foreign specialists are employed in foreign branches and joint ventures. They all receive some kind of income on invested capital or for their labor.

The gross national product (GNP) is used to measure the volume of goods and services produced using a country's own resources. Until 1992, it was GNP that served in Russia as the initial indicator for measuring the national product. GNP includes the value of goods created not on the territory of the country, but by its residents. If a country has a completely closed economy, then calculating GDP and GNP gives the same result. But in the context of globalization, there are almost no such countries left. In cases with an open economy, the quantitative discrepancy between GNP and GDP is formed due to the activities of foreigners in the territory of a given country and the activities of citizens of a given country abroad.

GNP (GROSS NATIONAL PRODUCT)- the market value of all final goods (material goods and services) produced by residents of a given country for a certain period (regardless of the territory in which production took place).

For example, the Gazprom company invested 10 billion rubles. into gas production in Turkmenistan, and 100 Russian specialists worked in the Turkmen oil industry. The income on invested capital and wages of Russian oil workers (factor income) amounted to an annual income of 4 billion rubles. These incomes represent part of Turkmenistan’s GDP, since they were created on its territory, but they are part of Russia’s GNP, since they were created by the labor of Russian citizens and the capital of a Russian company. Consequently, when calculating Russia's GDP, factor incomes created by Russian labor and capital abroad should be excluded from it. When we calculate Russia's GNP, we will have to include in it the amount of these incomes created outside the country. GNP = GDP + Net receipts from abroad. Net receipts are the difference between receipts from abroad and payments abroad.

For most large countries, the size of GDP does not differ significantly from the size of GNP. Thus, in 2010, the value of GDP exceeded the value of GNP by 2.6%. This means that the primary incomes of non-residents of Russia exceed the amount of income received by Russians abroad. Currently, the main macroeconomic indicator for measuring product in all countries is gross domestic product.

Source: Economics. Fundamentals of economic theory: textbook for grades 10–11. for educational organizations. Advanced level: in 2 books. Book 2 // Edited by: Ivanov S. I., Linkov A. Ya. Publisher: Vita-Press, 2018 Why is the System of National Accounts needed? If you want to get information about the level of production and welfare in a particular country, the sectoral structure of its economy, and the price level, then be sure to refer to statistical data. What is Gross Domestic Product (GDP)? Gross domestic product is the market value of all final goods (material goods and services) produced in the territory of a given country over a certain period. How to calculate national income, personal income and disposable income GDP is an important economic indicator that most fully characterizes the volume of the final product produced by the state in a given period. The difference between real GDP and nominal GDP We have already indicated that the volume of GDP, as well as all related macroeconomic indicators, is calculated in current prices at which created goods and services are sold. In this case, the value of nominal GDP is determined. GDP and quality of life Is it possible to measure the quality of life of people in a particular country using per capita GDP? Can we say that with an increase in the size of a country's GDP and national income, the population of any country always becomes more satisfied with the quality of their life? Gesell's monetary system How to limit the speculative activities of banks What is the ruble backed by? Reason for high GDP growth rates after 1998: depreciation of the ruble

(No ratings yet)

The final products and services produced using the internal resources of the state over a given period of time. GNP determines the cost of production made by production factors that are owned by citizens of this power, including on the territory of other states.

GNP characterizes both the uniform amount of costs and the uniform amount of profits in the economy.

Gross state product is considered an earlier indicator than GDP. It is worth noting that GNP is used in the statistics of a number of foreign countries to this day.

GNP reflects the consequences of work in two spheres of the ethnic economy of material production and services. Characterizes the cost of the entire volume of final production of products and services in the economy for 1 year (quarter, month). The attribute is calculated in values both current (working) and unchanged (tariffs of some base year).

Difference between GNP and GDP

GDP is calculated using the so-called territorial indicator. This is the total price of products from spheres of material production and areas of activity, regardless of the national affiliation of companies located in the area of this power;

GNP is oriented as the market price of all final goods and services produced in the economy for the year. With all this, an annual amount is provided for the final products and services created by the residents of the state, both within the state territory and abroad.

Another definition of GNP is the required amount of earnings of companies, organizations, and the population in material and intangible production. GNP also takes into account depreciation charges that will arise as a result of including part of the price of the products used (machines, machines, etc.) in the finished product. As with GDP, to correctly calculate GNP, you need to take into account all products and proposals completed this year once.

Thus, GNP differs from GDP by the required amount of so-called factor earnings from the use of the resources of this power abroad, transferred to the country of money invested abroad, belongings available there, the wages of people working abroad minus similar profits of foreigners exported from the power. Traditionally, in order to calculate GNP, the difference between the profits and earnings acquired by enterprises and individuals of this country abroad, on the one hand, and the profits and earnings acquired by foreign investors and foreign employees in this country, on the other hand, is added to the GDP indicator.

This difference is very small: for the main Western countries less than ±1% of GDP. The UN Statistical Service recommends using the GDP indicator as the main indicator.

Calculation of Gross State Product (GNP)

Thus, in order to obtain the gross state product, it is necessary to add to GDP the difference between receipts from factors of production (factor earnings) as a result of the border and factor earnings of non-residents in this country. Residents are all persons living on the territory of this power, not counting foreigners who come to it for a period of less than a year.

For example, after calculating the gross domestic product of Estonia for a certain period, it is necessary to add to it factor profits from Estonian firms located in other countries, and subtract the profits of firms from other countries located on the territory of the republic. The quantitative difference between the gross domestic product is not radical and in developed countries does not exceed 2%.

GNP can be represented in the form PQ, where the P sign represents the level of prices, and the Q sign is the volume of real material amenities and services that are legally sold and provided. As follows, natural production, natural exchange (barter), and labor are usually not reflected in the gross product.

Accounting for Gross State Product (GNP)

The gross product includes exclusively goods of final use at the prices of final buyers.

These include, firstly, products and offers that households purchase for their own use and, secondly, investment products. Also, final use goods include all municipal purchases and exports of products abroad.

Own-use goods include goods of daily use and long-term use: food, clothing, household appliances, etc.

Investment products contain all construction. Similarly, such goods include purchases of production equipment.

All municipal purchases of products, services and construction applications are considered final use products.

The creation, sale, and purchase of final-use products are considered productive transactions. As follows, these transactions increase the gross product. Unproductive transactions are not provided for in the GNP.

Gross product takes into account only the final goods produced over a certain period of time, for example a year. As follows, everything that was done last year cannot be taken into account again this year. In addition to all this, the product produced should be taken into account once. Eliminate sales and sales of old items that were already provided for earlier. This year's GNP, for example, will take into account cars produced in the same year, although old cars that are resold will not be taken into account in GNP. The product is considered sold as soon as it is purchased by the final buyer.

Stay up to date with all the important events of United Traders - subscribe to our

GNP is one of the group of main indicators developed by the UN Statistical Commission to compare the level of economic development of different countries.

Gross national product is the total value of all products produced in one year by residents of a country on their territory and abroad, calculated at market prices.

Together with other indicators, GNP is included in the System of National Accounts (SNA), which was created by the UN and has been used since the 50s of the last century. The latest version was developed in 1993 and is used in more than 100 countries around the world. Since 2013, instead of the word product, income has been used. Thus: GNP and GNI are synonyms, they are the same thing.

The SNA reflects the annual economic turnover of a country and is based on the same principles as the balance sheet of an enterprise. The national economy is presented in it as a general system, including production, redistribution, accumulation and consumption of products (Fig. 1).

Let us immediately explain the difference between similar indicators - gross national product and gross domestic product, how they differ from each other, and how they are related (Fig. 2).

GDP is determined on a territorial basis, and characterizes the state of the economy in a particular country. Through this quantitative indicator, the rate of reproduction of material resources, including labor productivity, is assessed.
GNP is determined on a national basis, and to a greater extent reflects the income of citizens of a particular country, regardless of where they were received (that’s why the name was changed). It is this indicator that is subsequently used to calculate average per capita income and HDI - the human development index.

Methods for calculating GNP

1. By expenses.

The methodology is based on calculating the expenses of all members of society, including the needs of the state and enterprises. Consists of the following components:

C is the consumption of goods and services by households;
I - investments in fixed assets and working capital: inventories, reserves;
G - government procurement at all levels, including services of military and civil servants;
NX is net exports, equal to the balance of goods sold abroad and imported.

The cost structure changes depending on the economic and political situation. Thus, with an increase in oil prices, the share of NX increases, and with a large volume of exports, the indicator may become negative. State expenses also increase during periods of natural disasters and military operations.

2. By income.

Gross national product is the total income earned by society. It consists of results for different types of activities (Fig. 3).

Entrepreneurial:

PC - profit of corporations from the operation of fixed capital: machines, buildings, equipment;
RD - rent received from the transfer of rights to develop subsoil, use of land, patents;
PE - payment for loans provided to businesses and other participants in economic life (net interest).

Labor - represents the sum of wages of hired workers (DV), and income received in the form of remuneration for work in one’s own enterprise (DS). In addition, the calculation takes into account depreciation (A) of fixed assets and indirect taxes: VAT, duties, excise taxes (KN).

For some purposes, the production method of calculating GNP, or the value added method, is used. DB is calculated as the difference between revenue and costs for each enterprise separately, and it can be tracked by the amount of VAT. It avoids double counting of final and intermediate products. For example, exclude from the cost of a car the cost of tires and paint produced by other companies.

What is GNP used for?

Gross national product cannot be considered a perfectly accurate measure of national well-being. When calculating it, it is impossible to take into account many factors: housework, gratuitous services, shadow business turnover, including criminal business: drugs, weapons. However, this is the main indicator for comparing per capita income in different countries. The dynamics of its changes in Russia over the past 6 years clearly show a sharp drop in living standards in 2014. Experts believe that capital outflow played a certain negative role in this.

According to the World Bank classification, countries are divided into 3 categories:

with a high level - more than $12,616/person,
with an average level - from 1,036 to 12,615 dollars/person,
with a low level - below $1,035/person.

Russia in 2013-2014 ranked 57th out of 187 countries, and was at the bottom of the high-income group. All European countries are higher than us, including the Baltic countries, and the USA (10) and Japan (40). The first places are occupied by Bermuda and Norway - more than $100/person. All countries of the former CIS have lower positions: Kazakhstan - 60th place, Ukraine - 118th, Belarus - 81st. China occupies 80th position.

GNP (GNI), longevity, access to knowledge are three values on the basis of which the HDI, or the so-called human development index, is calculated. It is adjusted for social and gender inequality, multidimensional poverty, and is considered a fairly accurate indicator of living standards. According to this indicator, Russia is in 57th place, and is one of the countries with a high rating.

Gross National Product (GNP)- one of the main macroeconomic indicators that give a general idea of the economic situation of the state. The term was first introduced by Simon Smith (Semyon Kuznets - a native of Pinsk, who later emigrated to the USA).

The essence of the concept can be represented as:

GNP = value of all final products (goods and services at market prices) produced by a country (domestic producers only) + the sum of net income from abroad.

Please note that only the final, ready-to-eat product is summed up, and not the intermediate product. Operations for the redistribution of the produced product are not included in the calculation. Therefore, the indicator does not include:

sale of used goods, because their cost is already taken into account during the first sale;
the cost of what is produced and consumed within households (for example, what is grown in personal plots);
natural exchange between citizens;
purely financial transactions (trading securities, etc.);
pensions, other financial transactions not related to the production of goods and services;
turnover "shadow".

GNP is calculated for a certain period, usually a year.

It is determined in monetary terms, in national currency or recalculated according to the established one into one of the “hard” currencies.

GNP is consonant with and, in fact, related to another common term - GDP (Gross Domestic Product). The difference is that it is determined on a territorial basis, while GNP is the sum of the results of the activities of national producers, regardless of their location. GNP can be obtained from GDP by subtracting the value of what foreign companies produce within the state and adding the results of activities of national enterprises abroad.

GNP can be calculated in three different ways:

by added value (production method) - by summing up all added values produced during the period;
by income (distribution method) - by adding income from rent, depreciation charges and indirect taxes;
by expenditure (end use) - by calculating the sum of household consumer spending, government spending (purchases), private domestic investment, net exports (exports minus imports).

Since the gross national product is a turnover indicator, i.e. the same value is for some an expense, for others an income, for others a result of production, its value does not depend on the calculation method.

Gross national product can be calculated in prices valid at the time of the study - Nominal GNP. Or taking into account price changes in the billing period - Real GNP. The amount by which Nominal GNP must be multiplied to obtain Real GNP is called the GNP Deflator.

The GNP deflator is the ratio of prices for goods and services in the period taken as the base period in relation to the calculation period.

GNP may be greater or less than GDP by the difference between the inflow and outflow of funds abroad. In cases where the income of non-residents within the country is greater than similar income received from the use of national factors abroad, GNP will be lower than GDP. This situation generally negatively characterizes the country’s economy and indicates an outflow of capital. The opposite situation is, as a rule, inherent in strong economic systems.

In the Republic of Belarus, as in many other countries, the difference between GDP and GNP is so small that it is often not taken into account.

If you notice an error in the text, please highlight it and press Ctrl+Enter

Gross National Product. The main characteristics of the gross national product are the following indicators.

GNP includes all products produced, including that part of it that is not sold; therefore, the increase in production inventories is taken into account when calculating GNP.
GNP is measured in monetary terms and reflects the market value of goods and services.
GNP excludes unproductive transactions entered into during the year. Such transactions include purely financial transactions and the sale of second-hand goods. Financial transactions are of three types: a) government transfer payments (social insurance payments, unemployment, pensions of various types); b) private transfer payments; c) transactions with securities.
GNP is free from double counting because it takes into account the market value of final products only. Final products are goods and services that are purchased for final use and not for further processing, processing or resale, i.e. The cost of intermediate products is excluded from the GDP.

In accordance with the modern international standard UN SNA (1993), the results of activities in the shadow sector of the economy are recommended to be included in GNP, including in that part of the sector where legally prohibited goods and services are produced. According to the 1986 UN SNA, when determining the value of GNP, the results of activities in the shadow economy were not taken into account. In a number of countries, attempts are currently being made to take into account in GNP the results of the activities of that part of the shadow economy where goods and services permitted by law are produced, but in this case tax laws are violated. At the same time, the overwhelming majority of countries, including Russia, do not consider it advisable to take into account goods and services, the production of which is prohibited by law, when calculating GNP.

Currently, in accordance with the system of national accounts, income tax can be calculated on a gross and net basis, i.e. before and after deduction of depreciation of fixed capital. In the first case, the gross national income is equal in value to the gross national product. In the second case, net national income compared to GNP is reduced by the amount of depreciation charges.

Methods for measuring GNP. There are three ways to measure GNP (GDP):

by value added (production method);
expenses (end-use method);
income (distribution method).

When calculating GNP using the production method, the value added at each stage of production of the final product is summed up.

Added value- this is the difference between the market value of products produced by the company and the amount paid to other companies for purchased raw materials, materials, etc. (i.e. for intermediate products).

The value of GNP is the sum of value added by all producing firms. If goods and services are created and sold only within the country, then the gross domestic product (GDP) indicator is used. The method of measuring the volume indicator, which takes into account the specific contribution of various firms and industries to the creation of GNP, avoids the problem of double counting.

The second way to measure GNP involves summing up the expenses of all economic agents using GNP. In essence, we are talking about the aggregate demand for produced GNP. The structure of total expenses can be presented as follows:

household consumption expenditures, including household expenditures on durable goods (except for housing purchases) and current consumption;
total private investment, consisting of depreciation charges and net investment. Net investment increases the stock of capital in the national economy;
public procurement of goods and services;
net exports of goods and services, calculated as the difference between exports and imports.

Of these components, the largest share usually falls on consumer spending, and the most dynamic indicator is investment spending. The share of consumer spending in GDP by the end of the 20th century. ranged from 40% in Singapore, 53% in South Korea, 58% in Japan, 68% in the USA. Total private investment accounted for from 16% in the US to 30% in Japan and 38% in South Korea. In the Russian Federation at the beginning of the 21st century. The main items of GDP expenditure were as follows: household consumption expenditure was 46.1%, gross capital formation - 17.1%, government expenditure - 14.4%, net exports - 20.4%.

When calculating GNP by income, all types of income for the relevant factors of production are summed up, as well as two components that are not income: depreciation charges and net indirect business taxes. GNP includes such types of income as wages of employees; owners' income; corporate profits; rental income; bank interest. If in the structure of GNP (GDP) as a whole the share of wages by the beginning of the 21st century. ranged from 52% in EU countries to 60% in the USA, then its share in the structure of factor income is noticeably higher (about 70% in the USA).

Of the considered methods for determining GNP, the production and end-use methods are the most widely used. This choice in most EU countries is associated with the availability of a reliable statistical base. Since in Russia currently the most accessible and timely information is data on the production of goods and services collected by Rosstat on the basis of statistical reporting of enterprises, the main method for calculating GNP (GDP) is the production method.

Since GNP is a monetary indicator, its value depends on price dynamics and the purchasing power of the monetary unit. Therefore, when determining the volume of production, it is necessary to take into account the price level, which is expressed in the form of a price index, which is the ratio between the total price of a certain set of goods and services (called the market basket) for a given time period and the total price of a similar group of goods and services in the base period ( base year):

Price index in a given year =

Market basket price in a given year
Market basket price in base year

The GNP price index is a GNP deflator. It includes the prices of consumer goods and services, the prices of capital goods purchased by the government, and the prices of goods and services bought and sold in the world market. Therefore, the GNP deflator is an adjustment of nominal GNP to account for changes in prices. Thus, GNP is a monetary, time and quantitative indicator. GNP expressed in current prices is called nominal GNP. GNP, adjusted for the price level, is called real GNP. It is calculated by the formula

Real GNP =

Nominal GNP
Price index

When calculating GNP, certain difficulties arise: some goods and services produced in a given year do not enter the market and therefore do not have a market price. In GNP they are taken into account at imputed value. For example, the services of civil servants who do not have a market value are taken into account in GNP as corresponding government expenses, in particular for employee wages. Many goods and services are produced and consumed by households without being exchanged in markets, and they are often not included in GNP calculations.

One of the problems in assessing the results of the national economy is taking into account the shadow sector of the economy. This problem is especially relevant for countries implementing economic reforms. The growth of the shadow sector and the difficulty of accounting for its scale lead to an underestimation of the value of GNP compared to the results of its use, since illegally produced goods and services and the income received are spent on consumption and accumulation legally.

Indicators of GNP or ND per capita, are often used for cross-country comparisons, in particular when assessing the level of well-being in a country. However, their use may lead to a distortion of reality. Thus, two countries may have the same GNP per capita, but different price levels and different purchasing power of the monetary unit. GNP does not reflect improvements in the quality of goods, changes in the structure of consumption and the distribution of goods and services among the population. When assessing the level of well-being of a society, the GNP per capita indicator can be supplemented by indicators of the level of education of the population, life expectancy, housing conditions, etc. This allows a more objective assessment of the level of well-being of the nation.