A Tweet claims trade makes up close to 30% of GDP today vs. 19.8% in 1990. Let’s investigate the claim.
— Kathy Jones (@KathyJones) March 7, 2018
The Tweet makes the claim by adding up real exports and real imports and divides the total by real GDP. I created a chart in Fred.
(Real Exports + Real Imports) / Real GDP
I confirm the numbers but the idea seems silly. Why?
Exports add to GDP while imports subtract from GDP.
(Real Exports – Real Imports) / Real GDP
(Real Exports – Real Imports) / Real GDP Details
The chart shows NET exports as a percentage of GDP.