Ireland is one of the few countries where GDP and GNP differ dramatically. Using GDP per person, Ireland has the third highest income per person in Europe. An article on the Financial Times website states that: "With GDP being about 20 percent larger than GNP, Irish people appear (when using GDP per person) to be richer than what they feel they are." Source: Valentina Romei, "Ireland Is the Wealthiest Economy in Europe...or Not," ft, May 13, 2015. Briefly explain the author's reasoning.

The article wrote by Valentina Romei, "Ireland Is the Wealthiest Economy in Europe...or Not," in May 13 2015 depicts the difference between GNP and GDP in Ireland.

What Valentina is trying to say is the Nationals of Ireland appear to have an Income per capita that is greater than it actually is because GDP includes all the production within the borders of a country. However, there must be a lot of foreigners that work in Ireland and contribute to Ireland GDP but when they are excluded to obtain the GNP then a great variation is revealed as GNP only accounts for the production of Ireland nationals.

Explanation:

Gross national product (GNP)

This term is an indicator that shows the total value of all the final products and services produced by means of production owned by a country's residents.

Its calculation includes the addition of consumption, government expenditure, private and domestic investment, net exports and income of residents earn in foreign markets minus income of foreigners earned in domestic market.