Net national income

It can be expressed as

$${\displaystyle \mathrm{N}\mathrm{N}\mathrm{I}=\mathrm{C}+\mathrm{I}+\mathrm{G}+\mathrm{N}\mathrm{X}+\left[\genfrac{}{}{0ex}{}{\text{Net Foreign}}{\text{Factor Income}}\right]-\left[\genfrac{}{}{0ex}{}{\text{Indirect}}{\text{Taxes}}\right]-\left[\genfrac{}{}{0ex}{}{\text{Manufactured Capital}}{\text{Depreciation}}\right]}$$

where C denotes consumption, I denotes investment, G denotes government spending, and NX represents net exports (exports minus imports: X – M).

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

$${\displaystyle {\mathrm{N}\mathrm{N}\mathrm{I}}^{\ast }=\mathrm{N}\mathrm{N}\mathrm{I}-\left[\genfrac{}{}{0ex}{}{\text{Natural Resource}}{\text{Depletion}}\right]}$$

Natural resources are non-critical natural capital such as 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:

• ${\displaystyle K_m}$ : manufactured capital (machines, factories, etc.)
• ${\displaystyle K_h}$ : human capital (workers' skills)
• ${\displaystyle K_n}$ : non-critical natural capital (minerals)
• ${\displaystyle K_h\ast }$ : critical natural capital (air, water)