National Product, Income, and Expenditure

Abstract

In principle, Net National Product is a better measure of aggregate output than Gross National Product, because until capital consumption has been deducted it cannot be said that double counting has been completely eliminated. Federal, state, and local governments contribute approximately 23% of total expenditure on Gross National Product. Approximately 86% of National Product originates in the sector of the economy. In practical calculations the transfer element is excluded from the income estimate, so that National Income is the sum of the yields of the nation's factors of production–that is to say, the National Product. As in the product estimates, the business sector is the largest contributor; in the United States over four-fifths of National Income originates in business. As a companion concept to Disposable Personal Income, it may be useful to have the concept of Disposable Corporate Income, i.e., the income remaining at the discretion of corporate managers once dividends and direct taxes have been paid.