Source: EconLog
by Art Carden
“In the run-up to the 2024 election, many people claimed that, in ‘Econ 101,’ GDP goes down when imports increase because the last part of the GDP equation is Net Exports (exports – imports). This demonstrates a failure to understand precisely what GDP measures and why net exports appear at the end of the equation. Gross Domestic Product is a measure of the economy’s total value added, and measuring value added is pretty complicated in a global economy where almost everything we buy has ‘value added’ somewhere other than the United States, and many things people in foreign countries buy reflect value that was added in the United States.” (08/11/26)
https://www.econlib.org/econlog/action-figures-and-the-balance-of-payments