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If one is only interested in estimating the domestic value-added embedded in a country’s or sector’s gross exports, applying Leontief’s insight is sufficient. However, for many economic and policy applications, one also needs to quantify other components in gross exports and their structures. In such circumstances Leontief’s original insight is not sufficient, as it does not provide a way to decompose intermediate trade flows across countries into various value-added terms according to their final absorption,

Our gross trade accounting framework in fact allows one to further decompose each of the four major parts of gross exports above into finer components with economic interpretations

By the gross statistics, presented in column 1 of Table 1, the trade is highly imbalanced – Chinese exports to the US ($176.9 billion in 2011) are five times that of US exports to China ($35.1 billion in 2011). If we separate exports of final goods and of intermediate goods (reported in columns 2a and 2b of Table 1), we see that most of the Chinese exports consist of final goods, whereas most of the US exports consist of intermediate goods.

In other words, the US exports rely overwhelmingly on its own value-added (only 2.1% from China and 5.8% from other countries in 2011), whereas the Chinese exports use more foreign value-added, especially value-added from third countries (with 3.2% from the US and 23.1% from Japan, Korea, and all other countries).

As a consequence of these differences in the structure of value-added composition, the China–US trade balance in this sector looks much smaller when computed in terms of domestic value-added than in terms of gross exports.

By identifying which parts of the official data are double counted and the sources of the double counting, our gross trade accounting method provides a transparent way to bridge official trade statistics (in gross terms) and national accounts (in value-added terms) consistent with the System of National Accounts standard.

After adjusting for multiple sources of bias and differences in sample construction, we establish that (1) the U.S. high school graduation rate peaked at around 80 percent in the late 1960s and then declined by 4-5 percentage points; (2) the actual high school graduation rate is substantially lower than the 88 percent official estimate; (3) about 65 percent of blacks and Hispanics leave school with a high school diploma and minority graduation rates are still substantially below the rates for non-Hispanic whites.

Heckman, Lochner, and Todd (2008) show that in recent decades, the internal rate of return to graduating high school compared to dropping out has increased dramatically and is now over 50 percent

These trends are for persons born in the United States and exclude immigrants. The recent growth in unskilled migration to the U.S. further increases the proportion of unskilled Americans in the workforce apart from the growth due to a rising high school dropout rate.

The most significant source of bias in the official statistics comes from including GED (General Educational Development) recipients as high school graduates.

A substantial body of scholarship summarised in Heckman and LaFontaine (2008) shows that the GED program does not benefit most participants, and that GEDs perform at the level of dropouts in the U.S. labour market.

Men now graduate from high school at significantly lower rates than women

Evidence suggests a powerful role of the family in shaping educational and adult outcomes. A growing proportion of American children are being raised in disadvantaged families.

In 2005 its government brought in fertiliser subsidies. It reported a maize crop of 3.4m tonnes in 2006-7, up from 2.6m tonnes the year before. The aid lobby said this justified the subsidies and the budget support which enables them to be paid for.

about 1.3 percent of GDP is devoted to the military.

Poland's President Bronislaw Komorowski announced Tuesday that Poland would raise that figure to 2 percent as "a very tangible, very clear engagement" in the alliance

1.2 percent of its GDP on the military

1.3 percent of its GDP on the military.

Germany is reducing the size of its army, which is expected to slightly trim military spending in coming years.

inancially challenged Spain's defense budget has shrunk from 1.2 percent of GDP in 2009 to 0.9 percent, NATO statistics show.

Unlike most other Spanish industries, car manufacturing has no sectorwide collective bargaining agreement with unions. As a result, each carmaker has been able to adjust working hours with its own employees, in response to changing demand.

In return, the companies have promised workers that they will not be subjected to the huge layoffs made in other parts of the economy,

I don’t want to give lessons to anybody. But at such a delicate moment for Spain, showing that we believe in flexibility and consensus has certainly been highly valued by the carmakers.”

In Germany, Hypo Real Estate, a property and public sector lender owned by the government after a bailout, owed its near collapse largely to problems at Depfa, its subsidiary in Dublin. Last month Hypo transferred most of its troubled assets to a so-called bad bank that will slowly wind down the investments.

The latest figures from the Bank for International Settlements put total European bank exposure to Portugal and Spain at $853 billion, with Germany, France and Britain the biggest creditors.

That worst-case forecast highlights another potential hidden risk. Credit-default swaps are typically sold over the counter by investment banks, with little information available publicly about the financial strength of the sellers. “Only then will we know for sure if the institutions that wrote the credit-default swaps have the liquidity and the financial strength to perform as contracted,” Mr. Weinberg wrote in a note last week.

The effect is amplified by competition for a shrinking pool of grant money and also by the design of so many experiments — with small sample sizes (cells in a lab dish or people in an epidemiological pool) and weak standards for what passes as statistically significant.

If one of five competing labs is alone in finding an effect, that result is the one likely to be published.

Among them is a paper in which C. Glenn Begley, who is chief scientific officer at TetraLogic Pharmaceuticals, described an experience he had while at Amgen, another drug company. He and his colleagues could not replicate 47 of 53 landmark papers about cancer. Some of the results could not be reproduced even with the help of the original scientists working in their own labs.

Scientists talk about “tacit knowledge,” the years of mastery it can take to perform a technique. The image they convey is of an experiment as unique as a Rembrandt.

The problem stands to get worse. It has been estimated that the corpus of scientific knowledge has doubled in size every 10 to 15 years since the days of Isaac Newton.

The authors come up with a variety of numbers, including one that has received a lot of attention: potential G.D.P.—broadly speaking, the level of G.D.P. consistent with stable inflation—“is currently about 7 percent below the trajectory it appeared to be on prior to 2007.” According to the latest figures from the Commerce Department, the G.D.P. is now close to seventeen trillion dollars, and seven per cent of that figure is $1.2 trillion. This is a lot of money to have gone missing, especially if it will never be recovered. Hence Krugman’s dire conclusion: “By tolerating high unemployment we have inflicted huge damage on our long-run prospects …. What passes these days for sound policy is in fact a form of economic self-mutilation, which will cripple America for many years to come.”

As well as figuring out the current level of potential G.D.P., the authors estimate its growth rate. This is the more important figure, because it’s what determines living standards over the long term

In the nineteen-eighties, Larry Summers and Olivier Blanchard, who is now the chief economist of the I.M.F., resurrected the idea and gave it a new name, which they borrowed from engineering: hysteresis. Blanchard and Summers examined hysteresis in Europe, where high rates of unemployment have long been a problem.

The good news is that things aren’t quite as bad as the figures in the Fed paper might suggest. If we can get policy right and sharply increase the level of over-all demand in the economy, most of the damage done in the past five years is reversible.

At the moment, sadly, there is no prospect of any more fiscal stimulus, let alone a war-sized one, and the onus is falling on the Fed to gee up the economy.

At its peak, the Zambia Consolidated Copper Mines company employed more than 65,000 Zambians and carried out services like water delivery and waste collection for five cities in the Copper Belt Province.

Mining employment has dropped to just 30,000, half of its glory-days peak, and the job of maintaining all that company housing and infrastructure has reverted back to the government.

The stats identify Switzerland as Zambia’s primary export market. This is not an indicator that Zambia hosts a thriving chocolate and suspenders sector, but rather that its copper trades are booked in the jurisdiction where they are least likely to be taxed.

Many of the mining companies pay just 0.6 percent royalties to Zambia, far below the already-meager industry standard of three percent.

This is Namwile Uzondile, the director of a rural health education project.

Last year Namwile conducted a survey of prostitutes here in Kitwe, and found that at least half of them had education certificates, but couldn’t find work. Most had been married off early, 15 or 16, and since then had either left their husbands or lost them to AIDS.

First, you go to the tribal chief. Ninety-four percent of the land in Zambia is customary or traditional, no one has a title to it. It’s not just sitting there, people are living on it, farming, grazing animals, it’s just technically under the control of a chief.

In Zambia most of the chiefs require a gift just to get a meeting. This might mean taking them lunch at a restaurant in Lusaka, or it could mean buying their daughter a car—it’s up to them.

Another reason Zambia lacks skills is that some parts of the workforce operate as cartels. Take lawyers. Zambia only has 1,000 of them, and they’re concentrated where the money is: Lusaka (government), Copper Belt (mining) and Livingstone (safari tourists).

Last year, only six lawyers were admitted to the bar out of 164 who took the exam. The year before that, it was 16 out of 145. Keep in mind, these aren’t people coming in off the streets. These are people who have a law degree.

More than 60 percent of Zambia’s government revenue comes from the copper mines.

Taxing all this informal activity would be costly in both resources and voter goodwill. In 2012, Zambia collected just $2.3 million in income taxes from its citizens.

It goes as high up as you want to follow it. Michael Sata, the president of Zambia, appointed his uncle the finance minister, his nephew the deputy finance minister, his niece the local government minister, and cousins as ambassador to Japan and chief justice.

Zambia’s cabinet has ballooned to 20 ministers and 47 deputy ministers, the largest in Africa. With salaries three to four times higher than opposition MPs and each ministerial post bundled with perks like a company car, free fuel, house servants, and mobile phone talk-time, you get the feeling politicians aren’t jumping from opposition into government on moral sentiment alone.

In 2011, Zambia spent a total of $4.3 billion running itself. Stretch that to cover every man, woman, and child, and it amounts to just $325 per person per year. That amount—less than a dollar per person per day—has to cover education, health care, infrastructure, law enforcement, foreign debt … everything.

Now she goes all NGO. “Little government capacity,” she says, is the nicest way to put it. “There are simply no systems for routine government services,” she says. Getting a license, a permit, certificates, approvals to start work, visas for expats to fly down here—nothing is in one place, nothing is fast or easy.

“Sometimes we have to pay for the inspectors to come to our mines,” Jane says.

The conversation goes like this: Jane tells the local certification body that she needs an inspector to sign off for a permit. The local certification body tells her that they would be happy to come out to the site, but they don’t have fuel for their cars, or enough petty cash to pay per diems. Jane offers to pay their costs, but only their costs, and the payments aren’t related to clearing the inspection.

The company has even paid the police to follow up on complaints or to investigate thefts. “They say, ‘We don’t have this in our budget’ or ‘We’ll need you to pay for it,’” Jane says. So the company fixes the police cars, covers their travel expenses, treats them to lunch.

“We tell them, ‘The company I work for, we’re not going to pay up.’ But at the end of the day, they know you’re on a short timeline, and they aren’t.”

Thomas’ family told him his nephews didn’t need to be in school. From their perspective, that’s not totally irrational. In a country with so few formal jobs and so much competition for getting them, I can see how spending hundreds of hours, thousands of kwachas, on education would seem superfluous. Thomas’ daughter wants to become a lawyer. You could almost forgive Thomas if he told her that the bar exam failure rate is more than 90 percent, so what’s the use?

International investors pledged $750 million last year to build infrastructure.

The election of 1989 marked the first time in more than 60 years that a civilian president had handed power to an elected successor.

the repeated recessions of the 1970s and 1980s, the hyperinflation of 1989-90, the economic crisis of 2001 and now the possibility of another crisis to come.

But three deep-lying explanations help to illuminate the country’s diminishment. Firstly, Argentina may have been rich 100 years ago but it was not modern. That made adjustment hard when external shocks hit. The second theory stresses the role of trade policy. Third, when it needed to change, Argentina lacked the institutions to create successful policies.

Railways transformed the economics of agriculture and refrigerated shipping made it possible to export meat on an unprecedented scale: between 1900 and 1916 Argentine exports of frozen beef rose from 26,000 tonnes to 411,000 tonnes a year. But Argentina mainly consumed technology from abroad rather than inventing its own.

External shocks duly materialised, which leads to the second theory for Argentine decline: trade policy.

Argentina raised import tariffs from an average of 16.7% in 1930 to 28.7% in 1933. Reliance on Britain, another country in decline, backfired as Argentina’s favoured export market signed preferential deals with Commonwealth countries.

an existing policy of import substitution deepened; the share of trade as a percentage of GDP continued to fall.

High food prices meant big profits for farmers but empty stomachs for ordinary Argentines. Open borders increased farmers’ takings but sharpened competition from abroad for domestic industry.

“One-third of the country—the commodities industry, engineers and regional industries like wine and tourism—is ready to compete,” says Sergio Berensztein, a political analyst. “Two-thirds are not.”

Property rights are insecure

Statistics cannot be trusted: Argentina was due this week to unveil new inflation data in a bid to avoid censure from the IMF for its wildly undercooked previous estimates.

hort-termism is embedded in the system

“We have spent 50 years thinking about maintaining government spending, not about investing to grow,” says Fernando de la Rúa, a former president who resigned during the 2001 crisis.

The country’s Vaca Muerta (“Dead Cow”) shale-oil and gasfield is estimated to be the world’s third-largest. If Argentina can attract foreign capital, the money could start flowing within a decade.