Net national disposable income (NNDI) measures a nation’s economic output available for its residents’ consumption and investment after accounting for depreciation, indirect business taxes, and other adjustments. For instance, if Country X has a GDP of $1 trillion, depreciation of $100 billion, indirect taxes of $50 billion, and government transfers of $20 billion, its NNDI would be $870 billion.
NNDI is crucial for understanding a country’s standard of living and economic well-being. It reflects the actual income available to individuals and businesses, which influences consumption, investment, and overall economic growth. Historically, the concept of NNDI emerged in the 20th century as economists sought to refine GDP measures and provide a more comprehensive assessment of economic activity.