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It's hard to know the origin of exported goods. Let's say your country exports wood, and you have imported screws. If you export furniture, do you assume it is
by seabee 17y ago
It's hard to know the origin of exported goods.
Let's say your country exports wood, and you have imported screws. If you export furniture, do you assume it is built using screws, and measure the country's added value by subtracting the value of the screws from the value of the furniture? Or maybe you believe it is glued, but actually uses screws - now you have overvalued.
And what if you import another, more expensive kind of screw from Japan, which looks identical but has different properties? Do you know which ones are being exported, and therefore what value the country is actually adding? And to think this is only a simple example!
- Tichy 17y agoYou bought screws for 1000$ and exported wood for 2000$ - so your "trade delta" is 1000$. I don't see what is complicated about it. Unless you are interested in seeing the delta per country you trade with. But what use is that number?