【正文】 a n 56. 19 5. 48 37. 69 3. 94 1 1. 93 0. 40 V a r i a nc e 17. 36 2. 36 21. 70 2. 86 24. 46 2. 86 Note: C includes both private consumption and government consumption (G). 15 III. GNP amp。 GDP in an Open Economy When capital and labor factors can flow outside, the difference between GNP and GDP emerges. What Is GNP? Gross National Product (GNP) is the market value of all final goods and services produced by a country’s factors of production in a given time period. It is a basic measure of a country’s national ine. Usually, “the GNP a country generates over some time period must equal its national ine, the ine earned in that period by its factors of production.”(See Krugman and Obstfeld(2020, p. 296) for a simple explanation) ?National Ine Account 16 What Is GDP? Gross Domestic Product (GDP) is supposed to measure the market value of production within a country’s borders. What Is the Difference? In a closed economy, GDP equals GNP. In an open economy, GNP equals GDP plus the ine earned by a country’s residents in other countries less those earned by other country’s residents in the domestic. ?National Ine Account 17 For simplicity, we may have, GNP=GDP+NFP Where, NFP is the ine of factor production. “As a practical matter, movements in GDP and GNP usually do not differ greatly.” (Krugman amp。 Obstfled, ) An illustration of the relation and the slight difference between GNP and GDP can be found in Table 112. Note: We will use GNP in the course hereafter. ?National Ine Account 18 Table 112 China’s GDP, GNP amp。 NFP Source: NBSC。 in 100 million RMB G N P GDP N F P N F P / G N P N F P / G D P 1978 3 6 4 5 .2 3 6 4 5 .2 0 0 .0 0 0 .0 0 1979 4 0 6 2 .6 4 0 6 2 .6 0 0 .0 0 0 .0 0 1980 4 5 4 5 .6 4 5 4 5 .6 0 0 .0 0 0 .0 0 1981 4 8 8 9 .5 4 8 9 1 .6 2 .1 0 .0 0 0 .0 0 1982 5 3 3 0 .5 5 3 2 3 .4 7 .1 0 .0 0 0 .0 0 1983 5 9 8 5 .6 5 9 6 2 .7 2 2 .9 0 .0 0 0 .0 0 1984 7 2 4 3 .8 7 2 0 8 .1 3 5 .7 0 .0 0 0 .0 0 1985 9 0 4 0 .7 9016 2 4 .7 0 .0 0 0 .0 0 1986 1 0 2 7 4 .4 1 0 2 7 5 .2 0 .8 0 .0 0 0 .0 0 1987 1 2 0 5 0 .6 1 2 0 5 8 .6 8 0 .0 0 0 .0 0 1988 1 5 0 3 6 .8 1 5 0 4 2 .8 6 0 .0 0 0 .0 0 1989 1 7 0 0 0 .9 1 6 9 9 2 .3 8 .6 0 .0 0 0 .0 0 1990 1 8 7 1 8 .3 1 8 6 6 7 .8 5 0 .5 0 .0 0 0 .0 0 1991 21 8 2 6 .2 2 1 7 8 1 .5 4 4 .7 0 .0 0 0 .0 0 1992 2 6 9 3 7 .3 2 6 9 2 3 .5 1 3 .8 0 .0 0 0 .0 0 1993 35260 3 5 3 3 3 .9 7 3 .9 0 .0 0 0 .0 0 1994 4 8 1 0 8 .5 4 8 1 9 7 .9 8 9 .4 0 .0 0 0 .0 0 1995 5 9 8 1 0 .5 6 0 7 9 3 .7 9 8 3 .2 0 .0 2 0 .0 2 1996 7 0 1 4 2 .5 7 1 1 7 6 .6 1 0 3 4 .1 0 .0 1 0 .0 1 1997 7 8 0 6 0 .8 78973 9 1 2 .2 0 .0 1 0 .0 1 1998 8 3 0 2 4 .3 8 4 4 0 2 .3 1378 0 .0 2 0 .0 2 1999 8 8 4 7 9 .2 8 9 6 7 7 .1 1 1 9 7 .9 0 .0 1 0 .0 1 2020 9 8 0 0 0 .5 9 9 2 1 4 .6 1 2 1 4 .1 0 .0 1 0 .0 1 2020 1 0 8 0 6 8 .2 1 0 9 6 5 5 .2 1 5 8 6 .9 5 0 .0 1 0 .0 1 2020 1 1 9 0 9 5 .7 1 2 0 3 3 2 .7 1237 0 .0 1 0 .0 1 2020 135174 13 5 8 2 2 .8 6 4 8 .7 8 0 .0 0 0 .0 0 2020 1 5 9 5 8 6 .7 1 5 9 8 7 8 .3 2 9 1 .5 9 0 .0 0 0 .0 0 2020 1 8 4 7 3 9 .1 1 8 3 8 6 7 .9 8 7 1 .1 9 0 .0 0 0 .0 0 2020 2 1 1 8 0 8 210871 9 3 7 .0 5 0 .0 0 0 .0 0 19 IV. Current Account Analysis Current Account, Import amp。 Export For countries like China, export is a major ponent of the current account (See Figure 115). In other words, if we neglect NFP, current account equals to the export. Let CA denote current account balance, thus, CA=XM, if NFP=0 See also Figure 115. ?National Ine Account 20 0 50000 100000 150000 202000 250000 300000 0 2 4 6 8 10 12 94 95 96 97 98 99 00 01 02 03 04 05 06 C A N E X R A T I O Figure 115 China’s Current Account Source: NBSC。 in million $ and % 21 Current Account amp。 Domestic Absorption As we have known that, Y=C+I+G+XM, if NFP=0 In the right hand of the identity, C, I, and G constitutes the gross expenditures of a country’s residents. We use A hereinafter to represent this item, we then obtain, A=C+I+G In this way, current account can also be viewed as the abstraction of national ine and absorption. CA=YA ?National Ine Account 22 ?What can we learn from CA=YA? Conclusions: The identity simply means that in an open economy, a country’s ine must not equal to the domestic expenditures, which should be hold in the closed economy. Also this tells us that in an open economy, resources can be allocated internationally. Table 113 shows the relations among these variables in China. Where Y is approximated by GDP, and column 8 is calculated according to the identity. We can see that it is the same to the time series data in column 6. ?National Ine Account 23 Table 112 China’s Absorption amp。 Ine Source: NBSC。 in 100 million RMB Y C I G （ X M ） A CA=Y A 1978 480 1 3617 1 1979 201 20 41 20 1980 1981 1982 5590 81 91 5499 91 1983 2039 1984 3742 1 1985 1986 1987 4462 12 1988 1989 1731 1990 6747 1991 7868 1992 10 1993 1994 7398 1995 1996 1997 29968 1 1998 1999 91 125 2020 98749 2020 2020 455