Description

As from issue number 50, the Series of Economic Studies of the Central Bank of Chile will be called Studies in Economic Statistics.

It is commonly stated that foreign trade represents 60% to 70% of the Chilean economy, a claim that is based on adding exports and imports and dividing by GDP. However, according to the international evidence, with globalization and the development of global value chains, exports are increasingly composed of imported inputs giving a misleading view of foreign trade size and its effects on economic growth. This paper provides recent empirical evidence on the evolution of domestic value-added and import content of Chilean exports by using an input-output framework in order to identify the direct and indirect effects of industries. For the period 2008-2012 domestic value-added accounted on average 31% of nominal GDP while the import content of export reached 9% of GDP and 23% of gross exports for the same period. At industry level, “Copper mining”, “Business services” and “Transport” are the activities that contribute most to the total value-added of exports. On the other hand, “Copper mining”, “Transport” and “Fuel” are the industries that contribute more to the import content of exports.