MACRO ECONOMICS 3
The difference between the size of the GDP and the GNP depends onthe number of firms that are working outside Netherlands. The 2015gross domestic product of Netherlands is 892 billion US dollars. Thisis the value of the total production within the country. GDP is usedto measure the economy of a county over a certain period of timeespecially one year. The Gross National Product for Netherlands forthe year 2015 was 998 billion US dollars (The World Bank, 2015). Itis evident that the GNP is bigger than the GDP. This is because theGNP factors in the income from expatriates in other countries. Boththe GDP and the GNP measure the value of an economy over a period oftime. Data from 2002 also show the GDP of Netherlands being at 400billion dollars while the GNP was at 598 billion dollars (Greenaway,2013).
According to me, I hold the view that it is better to have a biggerGNP than to have a bigger GDP. This is because the gross nationalproduct reflects the actual value of a country. The GNP does notcalculate the value added by foreigners but only considers what itsnationals both in the country and abroad can produce. It is evidentthat the GDP considers the production of the expatriates whose wealthis later repatriated back to their countries (UNESCO, 2015). Thismakes the GDP a falsified measure of a country’s productivity.However, it is essential to note that in most cases, the foreignersin a country do not repatriate all their income back to theircountries. Therefore, the productivity can be accounted for in theGDP of the country they reside. This has made many countries acrossthe world include the United States to adopt GDP as the measure oftheir economy.
Greenaway, D. (2013). The world economy: Global trade policy2012. West Sussex: Wiley- Blackwell.
The World Bank. (2015). Netherlands. Retrieved from: http://data.worldbank.org/country/netherlands
UNESCO. (2015). Education for all 2000-2015: Achievements andchallenges. Paris: UNESCO.