4 ms·

I don't think the bloomberg explanation is right, because the net effect of imports on GDP is zero. Assume you import $1 of goods, which are consumed. Then th

I don't think the bloomberg explanation is right, because the net effect of imports on GDP is zero. Assume you import $1 of goods, which are consumed. Then the GDP reflects $1 consumption (either private or government) minus $1 imports, for a net zero. The goods may not be consumed immediately, in which case GDP counts $1 inventories minus $1 imports, still net zero. The thing to remember is that GDP is domestic product, so anything produced abroad is irrelevant.

JumpCrisscross 4y ago
> the net effect of imports on GDP is zero Correct [1]. Net exports is a non-zero component of GDP, but "the imports variable (M) correct[s] for the value of imports that have already been counted as personal consumption (C), gross private investment (I), or government purchases (G)" [2]. [1] https://fredblog.stlouisfed.org/2018/09/do-imports-subtract-from-gdp/ https://fredblog.stlouisfed.org/2018/09/do-imports-subtract-... [2] https://research.stlouisfed.org/publications/page1-econ/2018/09/04/how-do-imports-affect-gdp https://research.stlouisfed.org/publications/page1-econ/2018...
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