June 28, 2007

The iPod

Many of you may remember the classic essay about the pencil, and how that simple product shows the global economy at work. Hal Varian has written a modern version of it here, focused on the iPod. The world's most popular music player has 451 parts that are made and assembled around the world. The final assembly in China accounts for only 1 percent of the value of an iPod, but when it is shipped to the United States, it counts as an import here, and adds $150 to our trade deficit. Remember that the next time you see a report on our balance of trade.

Posted by dweintraub on June 28, 2007 7:09 AM