Disney linkage dissolces in grease

Professor Edward Chen Kwan-yiu, of Lingnan University, once known to journalists as Dial-a-Quote, believes the new Disney theme park will be able to spark off a rapid recovery in the economy.

In an analysis published in this newspaper yesterday, he made two arguments worth considering. They are widely accepted arguments but, unfortunately, have some flaws.

The first was the indirect benefits of what he referred to as 'linkages', the idea that we ought to consider not only what the Disney park brings us directly but also the induced effects in other areas of the economy, which together, he said, are 'certainly much more than the estimated $148 billion'.

These linkages he divided into forward, backward, and horizontal linkages (academics are fond of categorising things).

He admitted that forward linkages, the relation between an activity and the sectors that use its output, are limited at Disney. They are indeed. Get off your ride, finish your Coke and that's it. This is not like spending money to make things others can use. It's the end of the line.

Backward linkages, the induced growth that expansion of one sector can provide to other sectors, include production of supplies that the park will need such as tools, costumes, food and beverages and Disney-labelled products, he said.

The difficulty here is most of these things will be imported and when you calculate economic growth you subtract imports from your figures, not add them. This will be an American theme park and we make precious few goods it can use so let's discount by far the bulk of these backward linkages.