Gross national product (GNP).
In plain English
Gross national product measures output by ownership: it counts what a nation's people and firms produce at home and abroad, and excludes what foreign-owned operations produce inside its borders. Gross domestic product does the opposite, counting production inside the borders regardless of who owns it. Start from GDP, add income residents earn abroad, subtract income foreigners earn domestically, and you get GNP. For most large economies the two land close together, but they diverge sharply where foreign companies dominate local production or where many citizens work overseas. The national accounts that produce both come from the Bureau of Economic Analysis.
01Why it matters
Which measure a headline uses changes the picture of a country's economy, because a place can show booming GDP while much of the income leaves for foreign owners.
02The math, step by step
Say a country has GDP of $1,000 billion. Its residents earn $60 billion abroad, and foreign-owned firms earn $110 billion inside the country. GNP is 1,000 plus 60 minus 110, or $950 billion.
Illustrative example. The amounts here are hypothetical, chosen to show how the math works, not real quoted rates or figures.
03What this is NOT
GDP is measured by location, GNP by ownership. A factory owned by a foreign company and running inside the country adds to GDP but not to GNP. A citizen working overseas adds to GNP but not to GDP.
04Receipts
Every figure on this page is sourced to a primary document. Tap to open the original.
Plain-English answers from our glossary. Receipts included. Never advice.
Educational tool. Answers come only from ClearMoneySchool's published glossary and are not advice. Why we never give advice