Measuring What Matters in Global Value Chains and Value-Added Trade

Abstract

The spread of global value chains (GVCs) has given rise to new statistical tools, the Inter-Country Input-Output tables and new analytical frameworks aimed at properly identifying production linkages between and within economies. However, several important questions remain unaddressed. This paper proposes a new toolkit for value-added accounting of trade flows at the aggregate, bilateral, and sectoral levels that can be used to investigate a broad set of empirical questions -- including an assessment of the share of trade related to GVCs. The paper shows how different empirical issues require distinct accounting perspectives, and maps these methodologies onto the economic questions they are best suited to address. In this way, in addition to providing novel tools, the paper brings a large part of the related literature under one comprehensive framework.