gross national product
/ GNP, jee-en-pee /
GDP counts everything made inside a country's borders. But a citizen of one country might own a factory in another, and a foreign company might run a plant inside your borders. Whose production should belong to whom? Gross national product answers by following the people rather than the place: it counts what a country's residents and firms produce no matter where in the world they do it.
Concretely, GNP starts from GDP, then adds the income that the country's residents earn abroad (profits of their overseas factories, wages of their citizens working abroad, returns on their foreign investments) and subtracts the income that foreigners earn inside the country. So GNP equals GDP plus net income from abroad. Suppose a country has GDP of 1000, its residents earn 80 abroad, and foreigners earn 50 inside it. Then GNP is 1000 plus 80 minus 50, which equals 1030. If instead the country hosts many foreign-owned factories, foreigners might earn far more inside it than its residents earn abroad, and GNP would fall below GDP.
GNP was the headline measure in many countries until the early 1990s, when most switched to GDP because it more cleanly captures activity and jobs located in the domestic economy. GNP still matters where the gap is large. A country full of foreign-owned multinationals can have a GDP that flatters it, because much of the profit leaves the country; its GNP, focused on what its own people actually earn, tells a soberer story. Ireland is a famous modern example of this gap.
A nurse from country A spends a year working in country B. Her wages count in country B's GDP (production happened there) but in country A's GNP (she is a resident of A). GDP follows the location; GNP follows the person.
GDP is about location; GNP is about who owns the income.
GNP and gross national income (GNI) are essentially the same total seen from production and income sides; today GNI is the more common term, and most countries report GDP as the headline figure rather than GNP.