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)
“Perhaps our national ambition to standardize ourselves has behind it the notion that democracy means standardization. But standardization is the surest way to destroy the initiative, to benumb the creative impulse above all else essential to the vitality and growth of democratic ideals.”
—Ida M. Tarbell (1857–1944)
“I had always been so much taken with the way all English people I knew always were going to see their lawyer. Even if they have no income and do not earn anything they always have a lawyer.”
—Gertrude Stein (1874–1946)