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That's actually not what I said. My example (obviously taken to extreme) was that a nation that only imports it's goods still has service activity reflected in the final sale price to the consumer. Service activity that accounts for that nation's entire GDP.
Do you agree that imported goods still cause internal economic activity, adding to the nation's GDP? I was under the impression that you were discarding that concept, but it appears that in your last post you acknowledge it. ...
Djmilf, due to “links of transaction chains”, both domestic and imported, (i.e. all) products contribute to their nations' GDPs. I never refuted that.
You apparently concured with Micea's contending imported products' contributions are as great or are additionally greater than those of domestic produced products.
On the contrary imported products' contributions are less that those due to their nation's similar domestic produced products.
For any given amount of a nation's net expenditures for goods and services, due their nation's annual net balance of international trade, surplus trade nations increased, and trade deficit nations decreased their GDPs more than otherwise.
Djmilf, due to “links of transaction chains”, both domestic and imported, (i.e. all) products contribute to their nations' GDPs. I never refuted that.
You apparently concured with Micea's contending imported products' contributions are as great or are additionally greater than those of domestic produced products.
On the contrary imported products' contributions are less that those due to their nation's similar domestic produced products.
For any given amount of a nation's net expenditures for goods and services, due their nation's annual net balance of international trade, surplus trade nations increased, and trade deficit nations decreased their GDPs more than otherwise.
Supposn, you appear to be advocating a "zero-sum game" concept regarding GDP - if one nation's GDP increases due to exports, the corresponding importing nation's GDP necessarily decreases by exactly the same amount. IMO, you achieve this by ignoring the examples I proffered that show that imports can have an offsetting increase in GDP for the importing nation, sometimes greater than the GDP "lost" from importation.
I would also add in the concept that if a nation's consumers can purchase imported products more cheaply than the same domestically produced products, that leaves more money in the pockets of consumers, who are then able to either spend more on other domestic products or to invest the savings realized by purchasing cheaper imports. Recall that the GDP equation that you first brought to the discussion and now appear to have tossed aside does include investment as part of GDP.
If autarky worked the way you're presenting it, everyone would be doing it.
Originally Posted by Supposn:
Regarding Djmilf’s example of a nation that doesn’t Import, in that case, the entire values of all products delivered to that nation’s consumers will have contributed to that nation’s annual GDP.
Quote:
Originally Posted by djmilf
That's actually not what I said. My example (obviously taken to extreme) was that a nation that only imports it's goods still has service activity reflected in the final sale price to the consumer. Service activity that accounts for that nation's entire GDP. ...
Originally Posted by Djmilf:
Wrap your brain around this - if the US produced nothing and imported everything, then (ignoring government spending and private investment) the US GDP would be the difference between what the American consumers paid for the imported products and the cost paid by importers for bringing the products in from overseas.
Djmilf, that's what posted, and we always entirely agree upon this point.
Djmilf, that's what posted, and we always entirely agree upon this point.
You said my example was "a nation that doesn't import".
My example actually says "a nation that only imports".
My original statement "if the US produced nothing and imported everything, then (ignoring government spending and private investment) the US GDP would be the difference between what the American consumers paid for the imported products and the cost paid by importers for bringing the products in from overseas".
I was talking about only imports, no exports. You cast my example as "no imports". That was my issue with your original statement.
But I believe that you agree with me that the consumer pays for the service of importing, marketing, and delivering an imported product, which adds to GDP. In concrete numbers, a pair of imported Levi's blue jeans that cost the consumer $70 added that $70 to GDP, but then one must back off the $5000 price paid to import 200 pair of said blue jeans ($25 per pair of blue jeans). Net GDP is $45.
Now if the blue jeans were made in a factory in Texas rather than in Vietnam, Bangladesh, or China, then the price wouldn't be $70. Levi's makes a Vintage clothing line that's made in the US, or, they did until 2003; now the Vintage line is made in Japan. But for argument's sake, let's pretend that they are still made in San Antonio, Texas. Levi's Vintage 501's can be bought for about $300 a pair. Vintage 505's are currently on sale for $134.
Taking the on-sale price, "made in USA" Levi's jeans are $134 net GDP per pair. Foreign made Levi's jeans are $45 net GDP per pair. If three times as many foreign-made Levi's jeans are sold as US-made jeans, then the GDP for foreign-made is $135 while the GDP for US-made is $134.
I'd wager that the ratio of foreign-made Levi's blue jeans versus "US-made" Levi's Vintage blue jeans purchased in this country is much higher than 3 to 1, ergo the foreign manufactured product contributes more to US GDP than the domestic manufactured product.
Djmilf, when an imported vehicle reaches the USA's entry port's dock, it has*contributed nothing to USA's GDP. When a domestic produced vehicle reaches its USA factory's shipping dock, it has contributed its entire value (only at that point), to USA's GDP.
Thereafter, beyond those 2 points in the USA, both domestic and foreign produced vehicles, are under USA's juridiction, handled, and/or processed by USA labor, and continue to additionally contribute to USA's GDP until the vehicles reach USA consumers or are exported from the USA.
(Mircea apparently believes the entire prices paid by USA consumers for imported products were all of those products contributions to USA's GDP).
Our discussion cannot advance further until we resolve any differences we have regarding these points. Do we have any differences regarding these points?
Djmilf, when an imported vehicle reaches the USA's entry port's dock, it has*contributed nothing to USA's GDP. When a domestic produced vehicle reaches its USA factory's shipping dock, it has contributed its entire value (only at that point), to USA's GDP.
Thereafter, beyond those 2 points in the USA, both domestic and foreign produced vehicles, are under USA's juridiction, handled, and/or processed by USA labor, and continue to additionally contribute to USA's GDP until the vehicles reach USA consumers or are exported from the USA.
(Mircea apparently believes the entire prices paid by USA consumers for imported products were all of those products contributions to USA's GDP).
Our discussion cannot advance further until we resolve any differences we have regarding these points. Do we have any differences regarding these points?
We are disagreeing because we are talking two different things. I wasn't being blunt enough in my responses. I will try to rectify that.
The GDP equation that you introduced into the discussion, GDP = C + I + G + (X - M), is based on expenditures. C is consumer spending, which is the sum of all products purchased by end-consumers. In other words, unit price multiplied by unit sales volume.
Your example requires that sales volume will remain exactly the same regardless of whether the sale item is imported or domestic. You also seem to be implying that there are no price differences between domestic and imported products.
My examples all take into account variations in sales volume due to consumer-perceived differences between imported and domestic products. I also include variances in unit pricing between imported and domestic products in my examples.
You cannot reduce a discussion of GDP to merely unit prices.
We are disagreeing because we are talking two different things. I wasn't being blunt enough in my responses. I will try to rectify that.
The GDP equation that you introduced into the discussion, GDP = C + I + G + (X - M), is based on expenditures. C is consumer spending, which is the sum of all products purchased by end-consumers. In other words, unit price multiplied by unit sales volume.
Your example requires that sales volume will remain exactly the same regardless of whether the sale item is imported or domestic. You also seem to be implying that there are no price differences between domestic and imported products.
My examples all take into account variations in sales volume due to consumer-perceived differences between imported and domestic products. I also include variances in unit pricing between imported and domestic products in my examples.
You cannot reduce a discussion of GDP to merely unit prices.
,
Djmilf, You're attempting to further advance our discussion. Our discussion cannot advance further until we resolve any differences we have regarding these points. Do we have any differences upon, (and ONLY UPON THESE) points? Do we have any differences regarding THESE points?
I do not intend to reduce or limit further discussions of GDP to only unit prices.
xxxxxxxxx
Originally Posted by Supposn:
Djmilf, when an imported vehicle reaches the USA's entry port's dock, it has*contributeg these points? d nothing to USA's GDP. When a domestic produced vehicle reaches its USA factory's shipping dock, it has contributed its entire value (only at that point), to USA's GDP.
Thereafter, beyond those 2 points in the USA, both domestic and foreign produced vehicles, are under USA's juridiction, handled, and/or processed by USA labor, and continue to additionally contribute to USA's GDP until the vehicles reach USA consumers or are exported from the USA.
(Mircea apparently believes the entire prices paid by USA consumers for imported products were all of those products contributions to USA's GDP).
Our discussion cannot advance further until we resolve any differences we have regarding these points. Do we have any differences regarding these points?
xxxxxxxxx
Djmilf, You're attempting to further advance our discussion. Our discussion cannot advance further until we resolve any differences we have regarding these points. Do we have any differences upon, (and ONLY UPON THESE) points? Do we have any differences regarding THESE points?
I do not intend to reduce or limit further discussions of GDP to only unit prices.
xxxxxxxxx
Originally Posted by Supposn:
Djmilf, when an imported vehicle reaches the USA's entry port's dock, it has*contributeg these points? d nothing to USA's GDP. When a domestic produced vehicle reaches its USA factory's shipping dock, it has contributed its entire value (only at that point), to USA's GDP.
Thereafter, beyond those 2 points in the USA, both domestic and foreign produced vehicles, are under USA's juridiction, handled, and/or processed by USA labor, and continue to additionally contribute to USA's GDP until the vehicles reach USA consumers or are exported from the USA.
(Mircea apparently believes the entire prices paid by USA consumers for imported products were all of those products contributions to USA's GDP).
OK, let's get back to that GDP expense equation, and plug your examples into it.
In the case of the imported vehicle, sitting at the dock in the seaport, assuming it cost $40k to import:
GDP = $0 end-consumer expense + $0 government expense + $0 investment + ($0 export value - $40,000 import expense) = -$40,000
In the case of the domestically produced vehicle, sitting at the shipping dock in the US factory:
GDP = $0 end-consumer expense + $0 government expense + $0 investment + ($0 export value - $0 import expense) = $0
As demonstrated in your specific example, the importation of one specific vehicle decreases GDP, but the production of one specific vehicle has no effect on GDP.
Quote:
Our discussion cannot advance further until we resolve any differences we have regarding these points. Do we have any differences regarding these points?
xxxxxxxxx
If you can't agree with the above, then you don't understand the methodology that you cited for computing GDP.
I'd also point out that there's much more involved in the GDP than simply watching a car hit a shipping dock, which is why I find your example flawed.
I don't doubt that Brawndo has electrolytes. I do doubt that electrolytes are what plants crave.
OK, let's get back to that GDP expense equation, and plug your examples into it.
In the case of the imported vehicle, sitting at the dock in the seaport, assuming it cost $40k to import:
GDP = $0 end-consumer expense + $0 government expense + $0 investment + ($0 export value - $40,000 import expense) = -$40,000
In the case of the domestically produced vehicle, sitting at the shipping dock in the US factory:
GDP = $0 end-consumer expense + $0 government expense + $0 investment + ($0 export value - $0 import expense) = $0 ...
Djmilf, your post is confusing. I don't know if you agree or disagree upon the comparison of values at different points of comparison between an imported or USA produced truck in the USA?
Let's go step by step because we cannot go further until we resolve all our differences regarding previous steps.
Assuming the cost of purchasing the imported truck and having it dropped down to the USA entry port's receiving dock was $40,0h00. Due the imported truck having been purchased by the importer and reached a point where it will thereafter be within USA's jurisdiction and handled and/or processed by USA labor, The net increase to USA's GDP, ONLY AT THAT POINT AND PLACE, is zero.
The entire $40,000 for producing and shipping the truck in a foreign ship to the USA was attributed to the GDPs of foreign nations. USA's GDP at that point has not been reduced or increased; do you think it was reduced? The $40,000 was the importer's investment.
ONLY UP TO THIS FIRST STEP OR POINT, do you agree or disagree? We cannot go further until we resolve all our differences regarding previous steps.
Djmilf, your post is confusing. I don't know if you agree or disagree upon the comparison of values at different points of comparison between an imported or USA produced truck in the USA?
Let's go step by step because we cannot go further until we resolve all our differences regarding previous steps.
Assuming the cost of purchasing the imported truck and having it dropped down to the USA entry port's receiving dock was $40,0h00. Due the imported truck having been purchased by the importer and reached a point where it will thereafter be within USA's jurisdiction and handled and/or processed by USA labor, The net increase to USA's GDP, ONLY AT THAT POINT AND PLACE, is zero.
The entire $40,000 for producing and shipping the truck in a foreign ship to the USA was attributed to the GDPs of foreign nations. USA's GDP at that point has not been reduced or increased; do you think it was reduced? The $40,000 was the importer's investment.
ONLY UP TO THIS FIRST STEP OR POINT, do you agree or disagree? We cannot go further until we resolve all our differences regarding previous steps.
This isn't on me. It's not on Mircea. It's on you.
Here's the problem - you don't understand how GDP is calculated by the expenditure equation. There are other methods, but this equation is the one used by the US Bureau of Economics. Since your entire discussion is about importing into the United States, that's the one to use.
It appears that you're trying to construct your own concept of how GDP is computed, and then attempting to force it upon others.
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