The total value of goods and services produced by a country’s residents, including income from abroad, is called Gross National Product.
GNP measures production associated with a country’s residents or factors of production, rather than simply measuring activity within the country’s borders. Its usual relationship is GNP = GDP + income residents receive from abroad − income paid to foreign residents operating domestically. It therefore captures the international flow of earnings connected to residents and ownership.
The key mix-up is with Gross Domestic Product, or GDP. GDP counts final production located inside a country, regardless of whether the workers or companies are domestic or foreign. Gross National Product instead follows the country’s residents and their productive resources. A country hosting many foreign-owned businesses may have GDP higher than GNP; the reverse can also occur.
In modern national-accounting terminology, GNP is generally called Gross National Income, or GNI. The underlying distinction remains useful: GDP emphasizes geography, while GNP or GNI emphasizes national income associated with residents. “Gross” means depreciation has not been subtracted.