# Gross national income

(Redirected from Gross National Income)

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 foreign residents, minus income earned in the domestic economy by nonresidents (Todaro & Smith, 2011: 44).[1] Comparing GNI to GDP shows the degree to which a nation's GDP represents domestic or international activity. GNI has gradually replaced GNP in international statistics.[2][3] While being conceptually identical, it is calculated differently.[4] GNI is the basis of calculation of the largest part of contributions to the budget of the European Union.[5] In February 2017, Ireland's GDP became so distorted from the base erosion and profit shifting ("BEPS") tax planning tools of U.S. multinationals, that the Central Bank of Ireland replaced Irish GDP with a new metric, Irish Modified GNI*. In 2017, Irish GDP was 162% of Irish Modified GNI*.[6]

## Comparison of GNI and GDP

${\displaystyle \mathrm {GNI} =\mathrm {GDP} +{\text{Money flowing from foreign countries}}-{\text{Money flowing to foreign countries}}}$

Comparison of GNI (Atlas method), GNI and GDP
2016 World Bank (millions of current US$) No. Country GNI (Atlas method)[7] GNI[8] GDP[9] value (a) a - GDP value (b) b - GDP 1 United States 18,357,322 -267,153 18,968,714 344,239 18,624,475 2 China 11,374,227 175,082 11,154,194 -44,951 11,199,145 3 Japan 4,816,892 -123,267 5,096,371 156,212 4,940,159 4 Germany 3,624,638 146,841 3,536,579 58,783 3,477,796 5 United Kingdom 2,778,488 130,590 2,587,657 -60,242 2,647,899 6 France 2,590,030 124,576 2,504,684 39,230 2,465,454 7 India 2,212,306 -51,486 2,235,524 -28,268 2,263,792 8 Italy 1,923,095 64,182 1,863,085 4,172 1,858,913 9 Brazil 1,835,993 39,806 1,758,527 -37,660 1,796,187 10 Canada 1,584,177 54,417 1,508,495 -21,265 1,529,760 ## GNI (Atlas method) nominal Nominal, Atlas method – millions of current US$ (top 15)[2]

Rank 2014 2013 2012 2011 2010 2009 2008 2007 2006
1   United States 17,611,491   United States 17,001,290   United States 16,501,016   United States 15,727,291   United States 15,143,137   United States 14,740,580   United States 15,002,428   United States 14,651,211   United States 14,345,565
2   China 10,096,966   China 9,110,333   China 7,934,721   China 6,726,270   China 5,752,320   China 4,856,999   Japan 4,835,553   Japan 4,812,119   Japan 4,931,413
3   Japan 5,339,076   Japan 5,899,905   Japan 6,101,579   Japan 5,775,633   Japan 5,376,601   Japan 4,797,984   China 4,070,860   Germany 3,348,291   Germany 3,160,529
4   Germany 3,853,623   Germany 3,809,927   Germany 3,754,154   Germany 3,801,607   Germany 3,662,524   Germany 3,588,452   Germany 3,601,765   China 3,283,519   China 2,685,206
5   France 2,844,284   France 2,869,883   France 2,824,713   France 2,889,304   France 2,847,703   France 2,831,553   United Kingdom 2,904,224   United Kingdom 2,835,805   United Kingdom 2,645,489
6   United Kingdom 2,801,499   United Kingdom 2,695,974   United Kingdom 2,612,525   United Kingdom 2,542,593   United Kingdom 2,540,957   United Kingdom 2,666,939   France 2,800,864   France 2,576,642   France 2,414,820
7   Brazil 2,429,720   Brazil 2,486,874   Brazil 2,432,061   Italy 2,237,958   Italy 2,234,508   Italy 2,227,358   Italy 2,222,143   Italy 2,093,640   Italy 1,989,288
8   Italy 2,147,247   Italy 2,130,760   Italy 2,143,583   Brazil 2,207,921   Brazil 1,916,260   Brazil 1,572,431   Spain 1,490,975   Canada 1,356,017   Spain 1,241,641
9   India 2,027,964   Russia 1,981,791   India 1,892,548   India 1,755,712   India 1,555,615   Spain 1,519,339   Canada 1,484,345   Spain 1,353,031   Canada 1,224,994
10   Russia 1,930,634   India 1,952,847   Russia 1,823,299   Canada 1,617,083   Canada 1,511,465   Canada 1,447,937   Brazil 1,427,429   Brazil 1,152,772   South Korea 966,585
11   Canada 1,785,099   Canada 1,848,274   Canada 1,773,264   Russia 1,547,010   Spain 1,496,363   India 1,392,779   Russia 1,368,593   India 1,117,463   India 941,326
12   Australia 1,444,201   Australia 1,514,269   Spain 1,396,221   Spain 1,455,758   Russia 1,425,123   Russia 1,318,495   India 1,229,139   South Korea 1,091,726   Mexico 921,879
13   Spain 1,366,027   Spain 1,376,929   Australia 1,359,417   South Korea 1,125,787   South Korea 1,053,302   South Korea 1,037,381   South Korea 1,118,647   Russia 1,079,991   Brazil 898,063
14   South Korea 1,365,797   South Korea 1,298,958   South Korea 1,232,164   Australia 1,119,902   Mexico 1,026,316   Mexico 988,663   Mexico 1,074,555   Mexico 1,000,700   Russia 830,146
15   Mexico 1,237,533   Mexico 1,202,800   Mexico 1,167,292   Mexico 1,068,140   Australia 1,025,186   Australia 954,754   Australia 900,062   Netherlands 809,106   Netherlands 753,205

## GNI (Atlas method) PPP

PPP – millions of international dollars (top 15)[3]

Rank 2016 2014 2013 2012 2011 2010 2009 2008 2007 2006
1   China 21,366,057   China 17,966,893   United States 17,091,162   United States 16,596,084   United States 15,802,898   United States 15,121,133   United States 14,494,460   United States 14,791,194   United States 14,585,723   United States 14,140,770
2   United States 18,749,688   United States 17,823,200   China 16,418,959   China 15,112,256   China 13,680,536   China 12,305,378   China 11,017,654   China 10,090,052   China 8,991,462   China 7,637,790
3   India 8,594,226   India 7,292,778   India 6,699,996   India 6,179,567   India 5,794,517   India 5,314,158   India 4,783,856   Japan 4,433,212   Japan 4,408,333   Japan 4,180,595
4   Japan 5,443,842   Japan 4,846,688   Japan 4,844,841   Japan 4,700,740   Japan 4,522,723   Japan 4,437,371   Japan 4,192,471   India 4,376,743   India 4,138,987   India 3,658,435
5   Germany 4,094,786   Germany 3,843,163   Germany 3,707,775   Germany 3,590,009   Germany 3,534,151   Germany 3,305,460   Germany 3,107,922   Germany 3,186,644   Germany 3,070,077   Germany 2,906,891
6   Russia 3,305,725   Russia 3,237,388   Russia 3,108,506   Russia 3,254,184   Russia 3,124,400   Russia 2,837,672   Russia 2,678,150   Russia 2,797,648   United Kingdom 2,325,258   United Kingdom 2,270,766
7   Brazil 3,075,469   Brazil 3,209,390   Brazil 3,081,266   Brazil 2,984,015   Brazil 2,923,559   Brazil 2,757,522   Brazil 2,453,733   Brazil 2,436,486   Russia 2,324,769   Brazil 2,103,694
8   Indonesia 2,929,424   France 2,655,517   France 2,625,346   France 2,494,655   France 2,495,100   France 2,381,563   France 2,291,855   United Kingdom 2,343,012   Brazil 2,288,657   France 2,094,160
9   France 2,835,242   Indonesia 2,592,315   United Kingdom 2,483,802   United Kingdom 2,394,758   United Kingdom 2,343,934   United Kingdom 2,281,280   United Kingdom 2,272,667   France 2,310,555   France 2,224,097   Russia 2,071,669
10   United Kingdom 2,763,382   United Kingdom 2,550,078   Indonesia 2,436,810   Indonesia 2,275,802   Italy 2,124,755   Italy 2,054,019   Italy 2,016,501   Italy 2,050,607   Italy 1,971,909   Italy 1,865,144
11   Italy 2,316,529   Italy 2,155,153   Italy 2,148,502   Italy 2,134,839   Indonesia 2,106,961   Indonesia 1,949,021   Indonesia 1,798,541   Indonesia 1,705,066   Indonesia 1,568,263   Indonesia 1,434,248
12   Mexico 2,262,919   Mexico 2,111,206   Mexico 1,939,753   Mexico 1,941,682   Mexico 1,859,264   Mexico 1,710,132   Mexico 1,597,656   Mexico 1,611,372   Mexico 1,516,236   Mexico 1,432,295
13   Turkey 1,907,486   South Korea 1,696,955   South Korea 1,652,081   South Korea 1,627,812   South Korea 1,568,631   South Korea 1,506,812   Spain 1,492,658   Spain 1,508,412   Spain 1,447,718   Spain 1,346,277
14   South Korea 1,833,914   Canada 1,576,495   Saudi Arabia 1,549,822   Spain 1,497,167   Spain 1,494,181   Spain 1,486,687   South Korea 1,393,108   South Korea 1,405,612   South Korea 1,350,407   South Korea 1,246,382

## Gross national product

Gross national product (GNP) is the market value of all the goods and services produced in one year by labor and property supplied by the citizens of a country. Unlike gross domestic product (GDP), which defines production based on the geographical location of production, GNP indicates allocated production based on location of ownership. In fact it calculates income by the location of ownership and residence, and so its name is also the less ambiguous gross national income.

GNP is an economic statistic that is equal to GDP plus any income earned by residents from overseas investments minus income earned within the domestic economy by overseas residents.

GNP does not distinguish between qualitative improvements in the state of the technical arts (e.g., increasing computer processing speeds), and quantitative increases in goods (e.g., number of computers produced), and considers both to be forms of "economic growth".[10]

When a country's capital or labour resources are employed outside its borders, or when a foreign firm is operating in its territory, GDP and GNP can produce different measures of total output. In 2009 for instance, the United States estimated its GDP at $14.119 trillion, and its GNP at$14.265 trillion.[11]

The term gross national income (GNI) has gradually replaced the Gross national product (GNP) in international statistics.[2][3] While being conceptually identical, the precise calculation method has evolved at the same time as the name change.[12]

### Use of GNP

The United States used GNP as its primary measure of total economic activity until 1991, when it began to use GDP.[13] In making the switch, the Bureau of Economic Analysis (BEA) noted both that GDP provided an easier comparison of other measures of economic activity in the United States and that "virtually all other countries have already adopted GDP as their primary measure of production".[14] Many economists have questioned how meaningful GNP or GDP is as a measure of a nation's economic well-being, as it does not count most unpaid work and counts much economic activity that is unproductive or actually destructive.[15]

### GNI VS GDP

While GDP measures the market value of all final goods and services produced in a given country, GNI measures income generated by the country’s citizens, regardless of the geographic location of the income. In many states, those two figures are close, as the difference between income received by the country versus payments made to the rest of the world is not significant. According to the World Bank, the GNI of the USA in 2016 was 1.5% higher than GDP.[16]

In developing countries, on the other hand, the difference might be significant due to a large amount of foreign aid and capital inflow. In 2016, the GNI [17] of Armenia was 4.45% higher than GDP [18]. Based on the OECD reports, in 2015 alone, Armenia has received a total of US $409 million development assistance. Over the past 25 years, USAID has provided more than one billion USD to improve the living of the people in Armenia. GNI equals GDP plus wages, salaries, and property income of the country's residents earned abroad that also constitutes the higher GNI figure. According to the UN report on migration from Armenia in 2015-17, every year around 15-20 thousand people leave Armenia permanently [19], and roughly 47% of those are working migrants that leave the country to earn income and sustain the families left in Armenia. In 2016 Armenian residents received in a total of around$150 million remittances [20].

## References

1. ^ Todaro, M. P., & Smith, S. C. (2011). Economic Development 11. Addison-Wesley, Pearson, ISBN, 10, 0-13.
2. ^ a b c World Bank. "GNI, Atlas method". data.worldbank.org. Retrieved 2016-06-23.
3. ^ a b c World Bank. "GNI, PPP (international $)". data.worldbank.org. Retrieved 2016-06-23. 4. ^ "Glossary:Gross national income (GNI)". Eurostat statistic explained. Eurostat. Retrieved 2016-06-23. 5. ^ "Monitoring GNI for own resource purposes". Eurostat statistic explained. Eurostat. Retrieved 2016-06-23. 6. ^ Heike Joebges (January 2017). "CRISIS RECOVERY IN A COUNTRY WITH A HIGH PRESENCE OF FOREIGN-OWNED COMPANIES: The Case of Ireland" (PDF). IMK Macroeconomic Policy Institute, Hans-Böckler-Stiftung. 7. ^ "GNI, Atlas method (current US$)". World Bank.
8. ^ "GNI (current US$)". World Bank. 9. ^ "GDP (current US$)". World Bank.
10. ^ Daly, Herman E. (1996), Beyond Growth. Beacon Press
11. ^ "Flow of Funds Accounts of the United States" (PDF). Board of Governors of the Federal Reserve System. 17 September 2010. p. 9.
12. ^ "Glossary:Gross national income (GNI)". Eurostat statistic explained. Eurostat. Retrieved 2016-06-23.
13. ^ "BEA: Glossary "G"". Bureau of Economic Analysis. 5 September 2007.
14. ^ "Gross Domestic Product as a Measure of U.S. Production" (PDF). August 1991.
15. ^ "Beyond GDP". The Economist. ISSN 0013-0613. Retrieved 2016-07-27.
16. ^ "BEA: The World Bank - US figures". the World Bank. 2017.
17. ^ [: https://www.macrotrends.net/countries/ARM/armenia/gnp-gross-national-product "BEA: Armenia GNP"] Check |url= value (help). Macrotrends. 2019.
18. ^ [: https://www.macrotrends.net/countries/ARM/armenia/gdp-gross-domestic-product "BEA: Armenia GDP"] Check |url= value (help). Macrotrends. 2019.
19. ^ [: https://www.un.am/en/news/561 "BEA: Migration Rate and Associated Issues in Armenia in 2016-2017"] Check |url= value (help). UN Armenia. 2017.
20. ^ [: https://www.cba.am/en/sitepages/statexternalsector.aspx "BEA: Inflow of Remittances by Balance of Payments"] Check |url= value (help). Central Bank of Armenia. 2019.