So my question is simple but what I would like to know is if my method of calculating something like that plausible or not. So it goes like this : the formula we took at lecture for calculating is

GDP = C + I + G + (X-Z)

With :

C= consumption , I = investment, G = government spending (army defense, etc...), X = exportations, Z = importations

If a TTIP is put in place between Europe and USA, creating a free trade zone following theory exportations will rise causing the economic growth of European countrys, this will also cause our consumption (C) to grow, I will not explain why to not have to go into any details but this will cause our importations (z) to also grow. So my question lies here, can I assume that exportations and importations are going to grow by the same quantity thus creating a balance and that the GDP will rise because of the rise in consumption or would that be an invalid theory? Will exportations and importations meet a certain equivalence at some point?

Sorry for my English I am studying in french so it is kind of hard to explain.

  • $\begingroup$ Given that the TTIP text is still (a) secret and (b) subject to negotiation, I'm not sure this is answerable. The leaked drafts suggest that something very different is on the table at the moment: not a Free Trade agreement, but rather regulatory capture. $\endgroup$ – 410 gone May 1 '15 at 10:08
  • $\begingroup$ I see, but assuming it is a Free Trade agreement...? $\endgroup$ – Amro elaswar May 1 '15 at 10:26
  • $\begingroup$ If your question is about the impact of international Free Trade on GDP and the current accounts of participating parties, you could just remove the reference to TTIP, as it doesn't add anything. $\endgroup$ – 410 gone May 1 '15 at 12:38

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