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Are you open?

The openness index measures countries' exposure to international trade

How much do countries rely on international trade? A common measure is the openness index, which adds imports and exports in goods and services and divides this sum by GDP. The larger the ratio, the more the country is exposed to international trade. Looking at the map, it’s quite apparent that the largest economies are the least open by this definition. But this is quite natural: Because they are so large, much of their trade is internal. For small economies that cannot produce everything they need, more trade has to be external. The extreme case here is Hong Kong, with a ratio of 440%. Indeed, it doubles as a trading hub, with more than its GDP being reexported.

Note: As of this writing, the last year available for this indicator is 2010. It is taken from the Penn World Tables, which are updated every few years.

How this map was created: Go to GeoFRED and select region type “Nation.” Look for “openness” in the dropdown menu.

Suggested by Christian Zimmermann.

Just one word: Plastics

Relative importance weights of the components of industrial production: Part 2

Actually, this post is not about just one word. There are at least four: plastics, yes, but also textiles, electricity, and ice cream.

As we discussed in the previous post, many sectors of the economy, with their specific products and processes, contribute to the nation’s overall industrial production. This graph traces the relative contributions of four more components from FRED’s 322 series in this category.

Over the past 45 years shown in the graph, the production of plastics has grown in importance pretty consistently; someone in, say, 1967 who invested in that industry might have seen a nice return. With some peaks and valleys, electric power generation has become demonstrably more important, too. And its growth has been largely countercyclical—that is, it revs up through each postwar recession. Textile mills, on the other hand, have been declining in importance in U.S. industrial production for the entire time this data series has been calculated.

And what to make of ice cream? The previous post traced the progress of cheese, another wonderful edible good. And just like cheese, ice cream is a very small part of U.S. industrial production but its degree of importance has remained deliciously tried and true (though these series are seasonally adjusted, which matters most for ice cream).

How this graph was created: Search for “Relative Importance Weights”: As noted above, you’ll find 322 series to choose from. Check the measures you want and click “Add to Graph.”

Suggested by George Fortier.

View on FRED, series used in this post: RIWG22111S, RIWG313S, RIWG3261S, RIWN31152S

Newspapers are still more important than cheese

Relative importance weights of the components of industrial production: Part 1

Many sectors of the economy, with their specific products and processes, contribute to the nation’s overall industrial production. The Board of Governors of the Federal Reserve System provides data on these components in their G.17 Industrial Production and Capacity Utilization release. As they state, these values are “estimates of the industries’ relative contributions to overall growth.” The graph above covers four specific components on the smaller end of the scale: newspaper publishing, cheese, tobacco, and fruit and vegetable processing. (FRED offers 322 series in this category.) Again, to be clear, these data measure the raw volume of goods that contribute to industrial production—not to health, wealth, or quality of life.

Over the past 45 years, the contributions of these components have changed—drastically, in some cases. From the late 1970s through the late 1980s, for example, newspaper publishing enjoyed prominence at the top of this list. But its contribution to this index has never been lower than it is today. Tobacco’s contribution surged to the top in the early 1990s and again in the early 2000s and is now neck and neck with fruits and vegetables. Cheese continues its quiet but rock-steady course at the bottom of this list.

How this graph was created: Search for “Relative Importance Weights”: As noted above, you’ll find 322 series to choose from. Check the measures you want and click “Add to Graph.”

Suggested by George Fortier.

View on FRED, series used in this post: RIWG3114S, RIWG3122S, RIWG51111S, RIWN311513S


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