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Tracing Value-Added and Double Counting in Gross Exports: Comment

  • Bart Los
  • Marcel P. Timmer
  • Gaaitzen J. de Vries
American Economic Review
vol. 106, no. 7, July 2016
(pp. 1958-66)
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Abstract

In a recent contribution to the AER, Koopman, Wang, and Wei (2014) proposed a decomposition of a country's gross exports into value-added components and double-counted terms. It is motivated by complex manipulation of basic accounting identities. In this comment we provide an alternative framework based on "hypothetical extraction." This parsimonious approach provides a clear definition of domestic value added in exports and has a natural extension into decompositions of bilateral export flows.

Citation

Los, Bart, Marcel P. Timmer, and Gaaitzen J. de Vries. 2016. "Tracing Value-Added and Double Counting in Gross Exports: Comment." American Economic Review, 106 (7): 1958-66. DOI: 10.1257/aer.20140883

Additional Materials

JEL Classification

  • E01 Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
  • E16 General Aggregative Models: Social Accounting Matrix
  • F14 Empirical Studies of Trade
  • F23 Multinational Firms; International Business
  • L14 Transactional Relationships; Contracts and Reputation; Networks