Input-Output Calculus of International Trade
60 Pages Posted: 9 Sep 2015 Last revised: 5 Oct 2015
Date Written: June 1, 2015
Although significant progress has been made in capturing value added flows behind gross trade statistics, there is room for improving the computational and analytical foundations of the proposed frameworks. In pursuit of such improvements, this paper proposes a generalised framework for value added accounting and a new framework for gross exports accounting. It is shown that both frameworks can be modified to account for the cumulative or incremental trade costs in the world of global value chains. The proposed formulations are exposed to numerical tests with the data from the World Input-Output Database for 2010.
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