30 January 2008

An economist writes...

I think one of the reasons I read The Economist is because it cuts through political debate to explain positions with great clarity and concision. Not to mention the fact that, somewhat misleadingly, it is not solely about economics; I can skip lightly from the global political analysis to the obituaries without troubling the Business and Finance pages.

Occasionally they invade the letters page to trouble me, however. Take the following letter from a Washington policy wonk from this week's edition, in reply to a previous article about Chinese economic growth:

"You cited estimates of exports in value-added terms from Jonathan Anderson, an economist at UBS, that strip out the associated imports and then subtract inputs purchased from other domestic sectors. But this is only the direct value-added in China's exports: Mr Anderson excludes the "indirect value added" generated by exports

"In order to produce exports, intermediate inputs must be used, and the production of these inputs creates the second round of value-added. This process of creating indirect value-added can be traced throughout the economy, as intermediate inputs are used to produce other intermediate inputs.

Fortunately the letter below this one was about Bruce Forsyth, where I felt on slightly firmer ground.

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