Net national income (NNI) is an economics term used in national income accounting. It can be defined as the net national product (NNP) minus indirect taxes. Net national income encompasses the income of households, businesses, and the government.
It can be expressed as:
NNI = C + I + G + (NX) + net foreign factor income - indirect taxes - manufactured capital depreciation
where:
- C = Consumption
- I = Investments
- G = Government spending
- NX = net exports (exports minus imports)
- NX also can be written as (X-M) which determines current account
This formula uses the expenditure method of national income accounting.
When net national income is adjusted for natural resource depletion, it is called Adjusted Net National Income expressed as below:
NNI* = C + I + G + NX + Net Foreign Factor Income - Indirect Taxes - manufactured capital depreciation - Natural Resource Depletion
Natural resource refers to non-critical natural capital like minerals. NNI* does not take critical natural capital into account. Examples are air, water, land, etc.
For reference, capital (K) is divided into four categories:
- K_m : manufactured capital (machines, factories, etc)
- K_h : human capital (workers' skills)
- K_n : non-critical natural capital (minerals)
- K_h* : critical natural capital (air, water)
Famous quotes containing the words net, national and/or income:
“A man’s whole life is taxed for the least thing well done. It is its net result.”
—Henry David Thoreau (1817–1862)
“Let him [the President] once win the admiration and confidence of the country, and no other single force can withstand him, no combination of forces will easily overpower him.... If he rightly interpret the national thought and boldly insist upon it, he is irresistible; and the country never feels the zest of action so much as when the President is of such insight and caliber.”
—Woodrow Wilson (1856–1924)
“The bread-winner must toil as in the fruitless effort of a troubled dream while the expenditure of an uneducated wife discounts the income in the lack of understanding to discern the broad possibilities of an intelligent economy.”
—Anna Eugenia Morgan (1845–1909)