All of a sudden it seems the difference between GDP & GNP has become real & important again, at least for commentators on Ireland.
In what Robert Peston calls a ‘refreshingly frank’ address Patrick Honohan, the governor of Ireland’s central bank said that GDP overstates the size of the Irish economy & productivity by including income which does not accrue to Irish residents. Last week a commentator on RTÉ1 said that part of the mad euphoria of the Celtic Tiger years came when Ireland’s GDP per head rose above that in the UK, & Irish residents formed the mistaken belief that they themselves were richer, which illusion would have been deflated if GNP per head had been compared.
But I wonder for how long might this remain true; with the rate at which our assets are being taken over might not UK GNP fall significantly below UK GDP.
