Real Gross National Product (GNP)

GNP is OG GDP.

Lettuce explain: GNP stands for "Gross National Product," which is an estimated value of all goods and services owned by a country’s residents, within a certain time period. American GNP includes pretty much anything Americans bought, whether it was from the U.S. or manufactured somewhere like China. Gross Domestic Product, or GDP, is pretty much everything Americans sold (so those "Made in China” goods bought...don’t count).

The U.S. used to focus on GNP, but switched to GDP around 1991. With globalization, what each country is producing is easier to compare than what each country is buying. It’s a small world after all.

And what does it mean when GNP is "real?" Well, besides being fo' real...it just means inflation was calculated out of it.

Why is taking inflation out of the equation important? When your grandpa starts telling you how burgers used to cost a nickel and how they’re so darn expensive now, that’s because grandpa isn’t comparing the real cost of one burger to another. Grandpa is comparing the "nominal" cost of the burgers, which is the sticker price, and ignoring the fact that pretty much everything—including incomes—are also higher today than they were back in his day.

While GDP is referred to more in news-speak, GNP is a better measure of national output. For the U.S., GNP is much higher than GDP, because the U.S. has a lot of productivity and money-making ventures happening overseas.