Net national product (NNP) refers to

gross national product The gross national income (GNI), previously known as gross national product (GNP), is the total domestic and foreign output claimed by residents of a country, consisting of gross domestic product ( GDP), plus factor incomes earned by foreig ...

(GNP), i.e. the total

market value Market value or OMV (Open Market Valuation) is the price at which an asset would trade in a competitive auction setting. Market value is often used interchangeably with ''open market value'', '' fair value'' or ''fair market value'', although th ...

of all final

goods In economics, goods are items that satisfy human wants and provide utility, for example, to a consumer making a purchase of a satisfying product. A common distinction is made between goods which are transferable, and services, which are not ...

and services produced by the

factors of production In economics, factors of production, resources, or inputs are what is used in the production process to produce output—that is, goods and services. The utilized amounts of the various inputs determine the quantity of output according to the rel ...

of a country or other polity during a given time period, minus

depreciation In accountancy, depreciation is a term that refers to two aspects of the same concept: first, the actual decrease of fair value of an asset, such as the decrease in value of factory equipment each year as it is used and wear, and second, the ...

. Similarly,

net domestic product The net domestic product (NDP) equals the gross domestic product (GDP) minus depreciation on a country's capital goods. GDP - D = NDP Net domestic product accounts for capital that has been consumed over the year in the form of housing, vehicle, ...

(NDP) corresponds to gross domestic product (GDP) minus depreciation. Depreciation describes the devaluation of fixed capital through wear and tear associated with its use in productive activities. Closely related to the concept of GNP is another concept called NNP of a country. NNP is a more accurate measure of total value of goods and services by a country. It is derived from GNP figures. As a rough estimate, GNP is very useful indicator of total production of a country. But if we are interested to have an accurate and true measure of what a country is producing and what is available for uses, then GNP has a serious defect. In national accounting, net national product (NNP) and net domestic product (NDP) are given by the two following formulas: :

NNP = GNP - Depreciation

NDP = GDP - Depreciation

Use in economics

Although the net national product is a key identity in national accounting, its use in economics research is generally superseded by the use of the gross domestic or national product as a measure of national income, a preference which has been historically a contentious topic (see e.g. Boulding (1948) and Burk (1948)). Nonetheless, the net national product has been the subject of research on its role as a dynamic welfare indicator as well as a means of reconciling forward and backward views on capital wherein NNP(''t'') corresponds to the interest on accumulated capital. Furthermore, the net national product has featured prominently as a measure in

environmental economics Environmental economics is a sub-field of economics concerned with environmental issues. It has become a widely studied subject due to growing environmental concerns in the twenty-first century. Environmental economics "undertakes theoretical or ...

such as within models accounting for the depletion of natural and environmental resources or as an indicator of sustainability.Asheim, G.B. (1994). Net National Product as an Indicator of Sustainability. ''The Scandinavian Journal of Economics'', 96(2), pp. 257-265.

References

National accounts {{Econ-stub

Use in economics

See also

References