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Net National Product

Net National Product Definition

Net National Product (NNP) is the total market value of all final goods and services produced by citizens of an economy during a given period of time (Gross National Product or GNP) minus 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 the amount which can be consumed in the future. Setting part of NNP aside for investment permits the growth of the capital stock (see economic growth and capital formation), and the consumption of more goods in the future.


NNP can also be expressed as total compensation of employees + net indirect tax paid on current production + operating surplus.





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