Calculating Trade in Value Added

26 Pages Posted: 5 Sep 2017

See all articles by Aqib Aslam

Aqib Aslam

International Monetary Fund (IMF) - Research Department

Natalija Novta

International Monetary Fund (IMF)

Fabiano Rodrigues-Bastos

Inter-American Development Bank (IDB)

Date Written: July 2017

Abstract

This paper sets out the key concepts necessary to calculate trade in value added using input-output tables. We explain the basic structure of an input-output table and the matrix algebra behind the computation of trade in value added statistics. Specifically, we compute measures of domestic value-added, foreign value added, and forward and backward linkages, as well as measures of both a country's participation and position in global value chains. We work in detail with an example of a global input-output table for 3 countries each with 4 sectors, provided by the Eora Multi-Region Input-Output (MRIO) database. The aim is to provide an introduction to the analysis of global value chains for use in policy work. An accompanying suite of Matlab codes are provided that can be used with the full set of Eora MRIO tables.

Keywords: Economic integration, Trade integration, Input-Output, Trade in Value Added

JEL Classification: F13, F15

Suggested Citation

Aslam, Aqib and Novta, Natalija and Rodrigues-Bastos, Fabiano, Calculating Trade in Value Added (July 2017). IMF Working Paper No. 17/178. Available at SSRN: https://ssrn.com/abstract=3030771

Aqib Aslam (Contact Author)

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Natalija Novta

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Fabiano Rodrigues-Bastos

Inter-American Development Bank (IDB) ( email )

1300 New York Avenue NW
Washington, DC 20577
United States

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