"... the Chinese trade surplus from its export to the United States has a quadrupling effect on added US gross domestic product (GDP). In other words, for every dollar of US trade deficit in favor of China, the US economy registers $4 of additional GDP in value-adding services, such as marketing, distribution and retail markup, trade and consumer financing, etc."
These services add to the price of products--thus they do increase the *current dollar* GDP. But they add nothing at all to the *real* quantity of produced *final* goods and services. Thus they add nothing at all to *real* GDP.
Shane Mage
"When we read on a printed page the doctrine of Pythagoras that all things are made of numbers, it seems mystical, mystifying, even downright silly.
When we read on a computer screen the doctrine of Pythagoras that all things are made of numbers, it seems self-evidently true." (N. Weiner)
