<p>I understand that when calculating GDP by spending, Imports are subtracted because we can't distinguish between the domestic and the imported components of C, I, and G.</p>
<p>But in the Keynesian Cross model and the Mundell-Fleming model imports are treated as an independent variable and thus potentially negatively affect the GDP. How to think right about the imports in these kinds of models?</p>

CC BY-SA 4.0
2024-10-30T13:38:05.640Z
could you clarify what you mean? In Mundell-Fleming model imports are also subtracted from GDP. Also, since imports depend on income, they are not independent either in GDP or Mundell-Fleming model (independent means exogenous), they are dependent (endogenous).
csilvia
CC BY-SA 4.0
2024-10-30T13:52:50.593Z
If I understand correctly, in Mundell-Fleming Im=f(Y*), so if Y* increases, Im increase, and Y falls. Is that correct? How can it be reconciled with the idea that Imports should not affect Y?
voligno
<macroeconomics><gdp><open-economy-macro>
GDP and Imports in the Keynesian Cross model and beyond
voligno
# GDP and Imports in the Keynesian Cross model and beyond

(Asked by: username_0 on 2024-10-30)

I understand that when calculating GDP by spending, Imports are subtracted because we can't distinguish between the domestic and the imported components of C, I, and G.

But in the Keynesian Cross model and the Mundell-Fleming model imports are treated as an independent variable and thus potentially negatively affect the GDP. How to think right about the imports in these kinds of models?

**Tags:** macroeconomics, gdp, open-economy-macro

> **Comments:**
> **username_1**: could you clarify what you mean? In Mundell-Fleming model imports are also subtracted from GDP. Also, since imports depend on income, they are not independent either in GDP or Mundell-Fleming model (independent means exogenous), they are dependent (endogenous).  
> **username_0**: If I understand correctly, in Mundell-Fleming Im=f(Y*), so if Y* increases, Im increase, and Y falls. Is that correct? How can it be reconciled with the idea that Imports should not affect Y?  

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