We describe the theory and practice of real GDP comparisons across countries and over time. Effective with version 8, the Penn World Table (PWT) will be taken over by the University of California, Davis and the University of Groningen, with continued input from Alan Heston at the University of Pennsylvania. Version 8 will expand on previous versions of PWT in three respects. First, it will distinguish real GDP on the expenditure side from real GDP on the output side, which differ by the terms of trade faced by countries. Second, it will distinguish growth rates of GDP based on national accounts data from growth rates that are benchmarked in multiple years to cross-country price data. Third, data on capital stocks will be reintroduced. Some illustrative results from PWT version 8 are discussed, including new results that show how the Penn effect is not emergent but a stable relationship over time.

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Online Appendix to: The Next Generation of the Penn World Table*

This paper proposes a framework for gross exports accounting that breaks up a country's gross exports into various value-added components by source and additional double counted terms. By identifying which parts of the official trade data are double counted and the sources of the double counting, it bridges official trade (in gross value terms) and national accounts statistics (in value added terms). Our parsimonious framework integrates all previous measures of vertical specialization and value-added trade in the literature into a unified framework. To illustrate the potential of such a method, we present a number of applications including re-computing revealed comparative advantages and the magnifying impact of multi-stage production on trade costs.

https://papers.ssrn.com/sol3/Delivery.cfm/nber_w18579.pdf?abstractid=2183038&mirid=1&type=2

Tracing Value-Added and Double Counting in Gross Exports

This paper proposes an accounting framework that breaks up a country’s gross exports into various value-added components by source and additional double-counted terms. Our parsimonious framework bridges a gap between official trade statistics ( in gross value terms) and national accounts (in value-added terms), and integrates all previous measures of vertical specialization and value-added trade in the literature into a unified framework. To illustrate the potential of such a method, we present a number of applications including re-computing revealed comparative advantages and the magnifying impact of multi-stage production on trade costs. (JEL E01, E16, F14, F23, L14) As different stages of production are now regularly performed in different countries, intermediate inputs cross borders multiple times. As a result, traditional trade statistics become increasingly less reliable as a gauge of the value contributed by any particular country. This paper integrates and generalizes the many attempts in the literature at tracing value added by country and measuring vertical specialization in international trade. We provide a unified conceptual framework that is more comprehensive than the current literature. By design, this is an accounting exercise, and does not directly examine the causes and the consequences of global production chains. However, an accurate and well-defined conceptual framework to account for value added by sources is a necessary step toward a better under standing of all these issues. Supply chains can be described as a system of value-added sources and destinations. Within a supply chain, each producer purchases inputs and then adds value, which is included in the cost of the next stage of production. At each stage, the value added equals the value paid to the factors of production in the exporting country. However, as all official trade statistics are measured in gross terms, which

/pdf/tracing-value-added-and-double-counting-in-gross-exports-5c7gk1dfo7.pdf

Tracing Value-Added and Double Counting in Gross Exports†

This article describes the construction of the World Input–Output Tables (WIOTs) that constitute the core of the World Input–Output Database. WIOTs are available for the period 1995–2009 and give the values of transactions among 35 industries in 40 countries plus the ‘Rest of the World’ and from these industries to households, governments and users of capital goods in the same set of countries. The article describes how information from the National Accounts, Supply and Use Tables and International Trade Statistics have been harmonized, reconciled and used for estimation procedures to arrive at a consistent time series of WIOTs.

/pdf/the-construction-of-world-input-output-tables-in-the-wiod-6aq88nq6gm.pdf

The construction of world input-output tables in the wiod project

We have developed a new series of environmentally extended multi-region input–output (MRIO) tables with applications in carbon, water, and ecological footprinting, and Life-Cycle Assessment, as well as trend and key driver analyses. Such applications have recently been at the forefront of global policy debates, such as about assigning responsibility for emissions embodied in internationally traded products. The new time series was constructed using advanced parallelized supercomputing resources, and significantly advances the previous state of art because of four innovations. First, it is available as a continuous 20-year time series of MRIO tables. Second, it distinguishes 187 individual countries comprising more than 15,000 industry sectors, and hence offers unsurpassed detail. Third, it provides information just 1–3 years delayed therefore significantly improving timeliness. Fourth, it presents MRIO elements with accompanying standard deviations in order to allow users to understand the reliability of ...

Mapping the structure of the world economy.

The World Input-Output Database has been developed to analyse the effects of globalization on trade patterns, environmental pressures and socio-economic development across a wide set of countries. The database covers 27 EU countries and 13 other major countries in the world for the period from 1995 to 2009. It is downloadable at http://www.wiod.org/database/index.htm. Length: 74 pages

JosŽ M. Rueda Cantuche

Papers

The World Input-Output Database (WIOD): Contents, Sources and Methods