What is the difference between GDP and GNP deflator calculation?

The difference between GDP and GNP deflator calculation lies in the components used to measure each indicator.

Gross Domestic Product (GDP) is a measure of the total value of all final goods and services produced within a country's borders during a specific period. It includes the production of both domestic and foreign-owned factors of production within the country. The GDP deflator is a price index that measures the average change in prices of all goods and services included in GDP over time. It is calculated by dividing the nominal GDP by the real GDP and multiplying by 100.

Gross National Product (GNP), on the other hand, measures the total value of all final goods and services produced by a country's residents, regardless of their location, during a specific period. It includes the production of domestic factors of production both within and outside the country's borders. The GNP deflator is a price index that measures the average change in prices of all goods and services included in GNP over time. It is calculated in a similar manner to the GDP deflator, by dividing the nominal GNP by the real GNP and multiplying by 100.

In summary, the main difference between GDP and GNP deflator calculation is that GDP measures the production within a country's borders, while GNP measures the production by a country's residents regardless of location. The deflators for both indicators measure the average change in prices over time, but they are calculated using the respective nominal and real values of GDP and GNP.