Abstract
In the 1990s, U.S. manufacturing will be heavily affected by two developments which have already played a major role in U.S. industrial performance in the 1980s. The first development is the shift in U.S. spending patterns from a nation living within its means to a nation living beyond them.
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Survey of Current Business, May 1988, p. 68.
Robert Z. Lawrence and Robert E. Litan, “The Protectionist Prescription: Errors in Diagnosis and Cure,” Brookings Papers on Economic Activity, 1:1987, p. 292.
Bela Balassa and Carol Balassa, “Industrial Protection in the Developed Countries,” World Economy, vol. 7 (June 1984), pp. 179–86.
See, for example, Ralph С. Bryant, Gerald Holtham and Peter Hooper (eds.), External Deficits and the Dollar: The Pit and the Pendulum (Brookings Institution, 1988).
An early example of this argument is provided in Hendrik S. Houthaker and Stephen P. Magee, “Income and Price Elasticities in World Trade,” Review of Economics and Statistics, vol. 5 (May 1969), pp. 111–15.
More recently, see Paul R. Krugman and Richard E. Baldwin, “The Persistence of the U.S. Trade Deficit,” Brookings Papers on Economic Activity, 1:1987, pp. 1–56.
Robert Z. Lawrence, “Threats to American Living Standards,” in Robert Z. Lawrence and Robert E. Litan, eds., American Living Standards: Threats and Challenges (Brookings, 1988). The impact on living standards is the percentage decline in the terms of trade times the share of trade in GNP, which is about 10 percent.
Fortune, July 18, 1988, p. 71.
In the case of manufactured goods, price elasticities are higher. Even with price elasticities of 1.5, starting from a position of balanced trade, three quarters of the turnaround resulting from higher foreign prices would occur through increased export earnings and one quarter from lower import values.
Kenneth A. Froot, “Multinational Corporations, Exchange Rates and Direct Investment,” National Bureau of Economic Research, Conference on International Policy Coordination and Exchange Rate Fluctuations, October 27–29, 1988, p. 1.
See Paul R. Krugman, “U.S. External Adjustment,” MIT (mimeo), background paper prepared for Board of Governors of the Federal Reserve, November 3, 1988.
And Peter Hooper, “Exchange Rates and U.S. External Adjustment in the Short Run and the Long Run,” Brookings Discussion Papers in International Economics, No. 65, October, 1988.
See Peter Hooper and Kathryn Larin, “International Comparisons of Labor Costs in Manufacturing,” Federal Reserve Board Discussion Paper No. 330,1988, p. 10.
See Ralph C. Bryant, “The U.S. External Deficit”: An Update, “Brookings Discussion Papers in international Economics,” No. 63, January 1988, table 3.
“Medium Term Prospects for the U.S. External Current Account,” mimeo 1988. See also Nigel Gault, “Implications of Present Policies: The U.S. Current Account: A Baseline Analysis,” in Alfred Reifman and Craig Elwell, eds., The Dollar and the Trade Deficit: What’s to be Done?, Congressional Research Service Report 88–430E, June 7,1988.
See Robert Z. Lawrence, “U.S. Living Standards: The International Dimension,” Living Standards: Threats and Challenges, chapter 2.
Edward F. Denison, “Estimates of Productivity Change by Industry: An Evaluation and an Alternative,” Brookings Institution, (mimeo) 1988.
Lawrence R. Mishel, Manufacturing Numbers: How Inaccurate Statistics Conceal U.S. Industrial Decline, Economic Policy Institute, Washington D.C., April 1988.
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© 1990 Kluwer Academic Publishers
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Lawrence, R. (1990). American Manufacturing in the 1990s: The Adjustment Challenge. In: Chilton, K.W., Warren, M.E., Weidenbaum, M.L. (eds) American Manufacturing in a Global Market. Springer, Dordrecht. https://doi.org/10.1007/978-94-009-2516-8_10
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DOI: https://doi.org/10.1007/978-94-009-2516-8_10
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