Value Added and GDP: The Smart Versus the Donkey
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If manufacturing matters—and if industrial policy can help develop manufacturing—that is because it creates high value added. Value added is a very popular concept in daily political and economic discussion. One hears it in the television debates and reads it in the newspaper articles; everybody wants higher value added, but few apparently are aware of what value added means technically and how it relates to the GDP. It is also a key concept inherent in the discussion in this entire book. So, this chapter digresses into the meaning of the concept and its relationship to the GDP and industrial policy.
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