Net national product

Net national product

Net national product (NNP) is the total market value of all final goods and services produced by residents in a country or other polity during a given time period (gross national product or GNP) minus depreciation. The net domestic product (NDP) is the equivalent application of NNP within macroeconomics, and NDP is equal to gross domestic product (GDP) minus depreciation: NDP = GDP - depreciation.

Depreciation (also known as consumption of fixed capital) measures the amount of GNP that must be spent on new capital goods to maintain the existing physical capital stock.

NNP is the amount of goods in a given year which can be consumed without reducing future consumption. Setting part of NNP aside for investment permits capital stock growth (see economic growth and capital formation), and greater future consumption.

NNP also equals total compensation of employees + net indirect tax paid on current production + operating surplus.

See also



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