Practice question · True or false
In the second globalisation, a large share of trade is in components crossing borders several times before final assembly.
Hints
- What does a modern supply chain look like?
- Gross trade double-counts.
Show the answer
True
Why
True. Production is fragmented into value chains, so intermediate goods cross borders repeatedly and gross trade figures double-count the same value. That is why value-added trade statistics were developed, and why a tariff on components taxes a domestic exporter's own inputs.
Practise The Second Globalization
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More questions on The Second Globalization
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