Friday, February 24, 2006

Why We Need International Trade Statistics?

Arnold Kling asked in his latest blogpost, "Why do International Trade Statistics Matter?"

The puzzle, as Don Boudreaux's article points out, is that such statistics have minimal economic significance in acutuality. My guess is that international trade statistics matter for the reason why we want to collect them in the first place.

1. Tax (customs duties) may be one reason why government would want to collect such statistics.

2. Some countries may decide that they want to promote certain industries, so they would need international trade statistics to help them implement their industrial policies....saying by taxing certain imports or subsidizing certain exports.

3. Another reason may be related to trade laws and the political system. Say if you have a law in place that allows you to seek help from the government when your industry is harmed by "unfair foreign imports". What you first need to do of course is to collect evidence, and the place to start is of course starting to collect international trade statistics.

1 comment:

Sea Bottom Coconut said...

Commercial bankers routinely invoke those numbers to support their lending decisions, (or to turn down loan applications when their judgements have the better of them ). That however is not why government should collect them. Market research companies can provide them, though not with the false sense of authority that comes with "official statistics". This is one rare case where government can actually help lower the cost of transaction for some business sectors. Whether this is a cost-effective way of going about it is of course a different matter. As we all know, taxes are always collected at gun point. In this case, bankers are clearly subsidized by the hapless average taxpayer.