On 4/28/06, paul phillips <[EMAIL PROTECTED]> wrote:
Doug, just a query.
Are the figures you quoted net of outsourced components?
No. They're value added.
"The GDP-by-industry accounts include estimates of value added by industry. Value added is a measure of the contribution of each private industry and of government to the Nation's GDP. It is defined as an industry's gross output (sales or receipts and other operating income, commodity taxes, and inventory change) minus its intermediate inputs (energy, raw materials, semi-finished goods, and purchased services)."
The "by-industry accounts" refers to the North American Industry Classification System.
http://www.census.gov/epcd/naics02/naicod02.htm
When you get down to the individual firms classified by that system there will always be some crossover activity that isn't captured in the statistics because a firm that is primarily active in one industry actually gets earns of its revenue from other industrial sectors. For analysis, you have to both "drill down" into the data and/or regroup it. Jamie Galbraith does a lot of that in his work on income inequality.
I think the data are trustworthy, in the sense of being as accurate as people can make these things (given constraints of time, budget, & analysis etc.). But superficial conclusions from the data can be misleading because the data are not as transparent as people, particularly journalists assume them to be or as simple as the classification system may make them seem. Remember that the classification system is, by definition, a simplification according to only one dimension. The questions we may want to ask of the data often pertain to other dimensions and so the answer we get from the data can be only approximate at best.
International comparisons of unemployment statistics, for example, show that even though they may measure approximately the same "thing", the meaning of that thing differs from one country to the next so that a country with a low unemployment rate may have less "labor market well-being"* than a country with a higher unemployment rate.
* defined as "1) the average current return from work; 2) the aggregate accumulation of human capital, which enables future returns from work; 3) inequality in current returns from work; and 4) insecurity in the anticipation of future returns from work.)"
--
Sandwichman
