What are the limitations of Trade ? And also the limitations of Growth Data. Cheers

Question

LIMITATIONS OF TRADE DATA

Answer 1

Ha hey Emily!!

omg i need to know this too!

Looks like we don't have enough notes!! Haha lol got luck in the internal today! I don't have a clue about the limitations! ha Sorry

This is one of the notes from our book..

Limitations of Trade Statistics

Trade statistics , as with any statistics, are only as good as the information collected. They are sample based and therefore do not reflect all activity. It is impossible to record every transactions; e.g. household importing via the Internet is not recorded. Trade statistics can tell us if we are exporting more or less than the year before, but do not tell us why. Are exports increasing due to a good season, or better marketing? The statistics also do not tell us about the good or service exported. Trade statistics do not tell us about the wider impact on the economy of exports and imports and the impact on associated industries or employment.

Limitations of data on growth

GDP has limitationns when used as  a measure of a country's standard of living. A better  indicator is a real GDP per capita (real GDP divided by the population), but this does not tell us how fairly the income is distributed. A country may have a high real GDP per capita but the wealth may be in the hands of a small proportion of the total population. Another limitation of real GDP per capita is that it really doesnt show the composition of output, i.e., what is actually produced. Spending on frigates or weapons of war contributes as much to GDP as  millions spent on health or education. High GDP may result in harmfull effects on the enviroment such as pollution, and features such as crime rates and stress are not directly measured in calculating GDP.