Greg Mankiw provides a chart of real GNP growth since 1998:
With revised GDP data released today, I thought it might be worth taking another look at recent history.
Whoops – GNP and GDP are not precisely the same thing but the growth in GNP and the growth in GDP have been very similar (the difference between these two series is net foreign income from abroad). I suspect Greg’s point is that real GNP is still growing but notice what BEA said:
Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 0.9 percent in the first quarter of 2008, according to preliminary estimates released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 0.6 percent … Real gross national product — the goods and services produced by the labor and property supplied by U.S. residents — increased 1.1 percent in the first quarter, compared with an increase of 1.9 percent in the fourth. GNP includes, and GDP excludes, net receipts of income from the rest of the world, which increased $5.3 billion in the first quarter after increasing $37.6 billion in the fourth; in the first quarter, receipts decreased $48.1 billion, and payments decreased $53.4 billion.
The rise in net income from abroad means that GNP rose faster than GDP over the past two quarters. And if one is wondering how Greg’s graph differs from the BEA text – notice the graph is comparing the current quarter to the quarter a year ago.
But let’s focus on something else – growth ever since late 2000. Its average has been rather dreadful. Now some rightwing pundits want to talk about some alleged Bush boom but the data shows that real income growth was quite weak except for the period from late 2003 through 2005.