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American Economic Review Vol. 106 No. 7 2016

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

Bart Los; Marcel P. Timmer; Gaaitzen J. de Vries

Faculty of Economics and Business, University of Groningen, PO Box 800, 9700 AV Groningen, The Netherlands (e-mail: )

open access

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.

DOI
10.1257/aer.20140883
Volume
106
Issue
7
Pages
1958-1966
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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