How to Determine the Contributions of Domestic Demand and Exports to Economic Growth?

According to the authors, there are two methods in use to determine the contributions of expenditure categories to economic growth. In the conventional ‘international method’, total imports are deducted from exports, whereas in what is known as the ‘Dutch method’, final and intermediary imports are allocated to all expenditure categories. Although the Dutch method is a little more complex than the international method, it has the considerable advantage that the contributions of the
expenditure categories to GDP growth can be better compared, producing a better understanding of the composition of GDP growth. This memorandum discloses the Dutch method and illustrates the differences in perception which the two methods produced for the years 1999 to 2004.