In Figure 11 we present ^ V V Ai an

In Figure 11 we present ^ V V A
i and ^ V IO
i for actual price changes in 2005 in the left panel,
with countries ordered by the size of deviations between the two measures. The rst thing to
note is that changes in demand for value added, as implied by our parameterized framework,
can be sizable. For example, in case of Korea, demand for value added in 2005 decreased
by 3.0-3.5 percentage points, depending on the demand measure used. At the same time,
demand for value added in Germany increased by 1.6 percentage points.38 Next, the gap
between the two demand measures { bV IO
it and bV V A
it { can be sizable as well, on the order of
-0.9 (Turkey) or 0.7 (Brazil) percentage points in the largest cases. Further, in Hungary and
Taiwan ^ V IO
i and ^ V V A
i actually move in opposite directions.
In the right panel of Figure 11, we plot deviations ^ V IO
i (~ = 1)