National income

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The national income is an economic indicator that

  • is only used in the German and Japanese language areas for the national accounts , for which there is no colloquial equivalent in English.
  • represents net national income at factor costs or net domestic income , in contrast to net national income at market prices (= net national product), which is closer to real payment transactions,
  • the theoretical sum of all goods and services produced in an economy expressed in money (i.e. not the market prices, but the factor costs) and the sum of all the income from domestic and foreign purchases, calculated in this way, by residents in the course of a year. and property income .

The national income (not to be confused with the national product) is based on the net national income, the sum of all goods and services produced in an economy expressed in money (i.e. not the market prices, but the factor costs) that have been consumed , invested or exchanged for foreign goods are less the value of depreciation .

It differs from net national income by adding the value of all subsidies and deducting so-called taxes on products. The term goods taxes include almost all indirect taxes including sales tax , mineral oil tax , tobacco tax, etc. In addition, trade tax is also one of the goods taxes. The goods tax form the predominant part of the state tax revenue in terms of revenue.

In the two-sector model , the simple theoretical basics and relationships of national income are presented. In the case of investments by companies, the national income can increase if the resulting capacity expansion results in a higher demand for labor. One speaks of the "income effect".

Production calculation

National income in Germany, before 1991 for the federal territory at that time

The starting point is the gross production value , i.e. H. the sum of the value of all goods (goods and services) produced in an economy (by residents and foreigners). Subtracting the value of the intermediate consumption results in the gross value added . Addition of goods control (production and imports) and subtracting the subsidies gives the gross domestic product .

The gross national income GNI is obtained after deducting the income of foreigners in Germany and adding the income of residents abroad . If one subtracts the depreciation , one arrives at the net national income at market prices or primary income . Subtracting the taxes on products and adding the subsidies on products finally gives the national income or net national income at factor cost.

+ Gross production value
- advance payments
= Gross value added
+ Taxes on goods
- subsidies on products
= Gross domestic product at market prices
- Income of foreigners in Germany
+ Income of residents abroad
= Gross National Income (GNI)
- Depreciation
= Net national income at market prices
- Taxes on goods
+ Subsidies on products
= National income (net national income at factor cost)

Usage calculation

All amounts spent on consumption and investment plus exports minus imports result in the gross domestic product.

The gross national income is obtained after deducting the income of foreigners in Germany and adding the income of residents abroad . This, in turn, minus the depreciation, gives the net national income at market prices. If you now deduct the taxes on goods (taxes on production and imports) and add the subsidies, you get the national income or net national income at factor costs.

+ Consumption (private and public consumption)
+ Investment
+ Exports
- imports
= Gross domestic product (GDP)
- Income of foreigners in Germany
+ Income of residents abroad
= Gross national income
- Depreciation
= Net national income at market prices
- Taxes on goods (production and import taxes)
+ Subsidies on products
= National income (net national income) at factor cost

Relationships of the distribution calculation

The sum of all income generated domestically (including by foreigners) is the net domestic product at factor costs . After deducting the income of foreigners in Germany and adding the income of residents abroad, the result is the net national income at factor costs or national income.

In the figure, the GNI is set equal to 100%. Without the depreciation (top size, purple) and the balance from taxes on goods and subsidies (second top size, tiled in black), the national income remains.

Problems in practice

The above-mentioned data is recorded in all member states of the European Union according to the uniform European system of national accounts (ESA), which is comparatively precise because the contributions made by the member states are based on it. The term national income is not included in the ESA. The conceptually identical “net national income at factor costs” can easily be calculated from the ESA. It is usually not shown separately.

See also

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