4 ms·
I don’t think those details are what the author is trying to draw attention to. They’re saying that treating the “minus M” part of C+I+G+X-M is just an account
by digitalPhonix 1y ago
I don’t think those details are what the author is trying to draw attention to.
They’re saying that treating the “minus M” part of C+I+G+X-M is just an accounting step so that you don’t need to manually subtract imports from each of C+I+G (ie. the weighing yourself analogy; instead of taking your clothes off and weighing yourself, you can weigh yourself and subtract the weight of your clothes).
Everything you said is correct (and means that the statement “imports subtract from GDP” is even more wrong) but not what the author is pointing out.
- amluto 1y ago> I don’t think those details are what the author is trying to draw attention to. This is true. But the author seems to be perpetuating a different misunderstanding: that, when you spend $1000 at a store to buy a TV, $1000 is disappearing out of the US economy and going straight to China or Korea.