ABSTRACT
In a recent article published in this Review, Balk (2025) suggests that trading gains might just be a statistical artifact. This rather provocative proposition is in sharp contrast with the empirical evidence that trading gains (or losses) in open economies can exceed several percentage points of gross domestic product (GDP). The U.S. Bureau of Economic Analysis and Statistics Canada, for instance, routinely publish trading-gains statistics, and the System of National Accounts (SNA) has emphasized their role for many decades, so that Balk’s claim is rather intriguing. Balk’s demonstration that trading gains might vanish altogether is based on a measure of real gross domestic income (GDI) that he derives in two steps, but which turns out to be identical to his volume measure of GDP, so that the trading gains—which can be defined as the difference between the two—are obviously nil. This discussion provides the opportunity to present for the first time trading-gains measures in terms of Montgomery-Vartia indices and Montgomery indicators, and to point out some continued internal inconsistencies in the handling of the subject by the latest version of the SNA.