Costs and benefits of producing or importing.

Oct 2009
Cliffside Park, NJ
The costs and benefits of producing or importing:

The expenditure formula itself only reduces or increases GDP by the nation's net trade balance which is based upon the dollar value of globally traded products. But there's often additional production supporting goods and services that are not fully paid for by product producers, and are not reflected within the products price valuation.

GDP cannot report what may have been produced if we did not experience a trade deficit, (i.e. a negative net balance of trade). Surpluses always increase, and trade deficits always decrease their nation's GDP more than otherwise.

The extent of global trades' actual effects upon their nation's annual GDPs are almost always, (if not always) exceeding, and never less than the extent of their nation's net global balance of trade.

For example, it's not unusual for governments and universities to boost local economies by providing producers with valuable research and development at lesser than market value or costs; government infrastructure that favors an important producer or industries; training and education tailored to serve a particular company or industry. These all increase their nation's GDP but if they are not reflected within the prices of exported products, exports full contributions to the nation's GDP are not attributed to the nation's global trade.

Respectfully, Supposn