Policy implications of value added vs gross trade flows

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At VoxEU, Shimelse Ali and Uri Dadush talk about the policy implications of how we measure trade flows of intermediate inputs, a topic I’ve been covering a lot recently. They say: “Bilateral trade balances are not appropriately measured, the costs of protection are higher than often understood, trade is more volatile, and the importance of exports as drivers of short-term demand is overestimated.”

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