Report on the State of Available Data for the

Transcript:Report on the State of Available Data for the:
Report on the State of Available Data for the Study of International Trade and Foreign Direct Investment Robert Lipsey National Bureau of Economic Research and City University of New York Presentation to the Federal Economics Advisory Committee December 17, 2010 Report was commissioned by the Committee on Economic Statistics of the American Economic Association. http://www.vanderbilt.edu/AEA/AEAStat/pdfs/Report_on_Trade_Data_April_23_2010_FINAL.pdf 2 Lipsey FESAC 12/17/10 Focus on trade and FDI data available for the U.S. omitting portfolio investment and international macroeconomic data. 3 Lipsey FESAC 12/17/10 Policy Issues Effects of import price changes on U.S. inflation, wages, productivity. Effects of “offshoring” on U.S. employment, wages, productivity. 4 Lipsey FESAC 12/17/10 Policy Issues Focus on measuring “offshoring” and its effects on wages and employment in the United States. Little attention paid to exporting, but some note taken of the uncertainty of the country resource content of imports. 5 Lipsey FESAC 12/17/10 Policy Issues: Example Uncertainty of country resource content of imports highlighted by Wall Street Journal article “Not Really ‘Made in China’” (Wall Street Journal, December 16, 2010) on the location of the resources incorporated in U.S. imports of the iphone from China. 6 Lipsey FESAC 12/17/10 Policy Issues: Example, cont. Issue: location of production of components and other intermediate products incorporated into the Chinese exports. Source of article estimates these account for most of value, with the Chinese assembly labor adding less than 4 percent. But some part of the value of the imports consists of previous exports from the United States: the value of the inventions and designs originating in the United States. The issue is reflected later in the report in the discussion of intellectual property. 7 Lipsey FESAC 12/17/10 Commodity trade data Distinction between IMF Balance of Payments Manual rules and traditional rules for collection of trade data. Shares of imports in intermediate inputs of individual industries. Distinction between gross value of trade and value added. 8 Lipsey FESAC 12/17/10 International price data Extremely limited data on prices in service trade. Use of Laspeyres index formulas in price indexes. Measurement of effects of switching of sources of imports. 9 Lipsey FESAC 12/17/10 International price data One issue not faced in the report is the fact that a large part of international trade takes place within, rather than between, companies. Much of it is in unfinished products that cannot easily be compared with the finished products in arm’s length trade between companies. Assigning the