Definition: Gross National Product (GNP) is Gross Domestic Product (GDP) plus overseas investments by U.S. residents and businesses, as well as products manufactured overseas by U.S. businnesses. It subtracts out U.S. investments by overseas residents and products manufactured in the U.S. by overseas businesses.
Unlike GDP, it is not used as a measure of the U.S. economy because it gives an inaccurate picture of how U.S. resources are used. For example, if there were a drought in the U.S., GNP would be higher than GDP because the foreign holdings of U.S. residents (included in GNP, but not in GDP) would be unaffected by the drought. The foreign holdings of U.S. residents would also be affected by currency exchange rates, which do not accurately reflect the state of the U.S. economy.
Examples: The Gross National Product of the U.S. tells you more about the health of the multi-national corporations located in the U.S. than it does about the health of the U.S. economy.
