I wrote: >>3% does not sound like much (assuming that figure is about right). But if >>we assume that imports from non-industrial core countries are goods rather >>than services, and that about 2/3 of GDP is services, a more relevant >>figure for this discussion is 9%... >>>>Bill Burgess Brad replied: >No it isn't. The relevant figure for this discussion is 3%--unless >you're some weird material-physiocrat who doesn't believe that >services really add value... >>Brad DeLong It't true, I have neo-physiocrat tendencies. Silly me, I still think there is an important difference between goods and services, especially that they are not substitutes for each other. If the U.S. and Canada lost our imports of nature and labour from other countries we couldn't make it up with more lawsuits and cosmetic surgery. That is why I think that in this discussion it is better to measure the impact of trade in terms of the goods economy rather than the bubble called GDP. On the other hand, after writing the above I remembered that when tourists spend money elsewhere this is an import (of tourist services), which are considerable, so it is probably not right to assume the 3% is all goods. Bill Burgess
