The Value-Added Content of International Trade: New Data, New Perspectives

The monitoring of bilateral trade balances is only of limited relevance when it comes to economic policy analysis. The key aspect is the added-value of trade, for this is responsible for domestic prosperity, for wage levels, capital income and tax revenues. The official trade statistics, which also cover external value creation, tend to differ significantly from the adjusted data. The first results of an Ifo research project that calculates bilateral value creation chains, show, for example, that Germany’s net added-value in the GIPS countries is overestimated by around 20%.