Global Imbalances and Structural Change in the United States / Timothy J. Kehoe, Kim J. Ruhl, Joseph B. Steinberg.

Format:

Book

Author/Creator:

Kehoe, Timothy J.

Contributor:

National Bureau of Economic Research.

Ruhl, Kim J.

Steinberg, Joseph B.

Series:

Working Paper Series (National Bureau of Economic Research) no. w19339.

NBER working paper series no. w19339

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2013.

Summary:

Since the early 1990s, as the United States borrowed heavily from the rest of the world, employment in the U.S. goods-producing sector has fallen. We construct a dynamic general equilibrium model with several mechanisms that could generate declining goods-sector employment: foreign borrowing, nonhomothetic preferences, and differential productivity growth across sectors. We find that only 15.1 percent of the decline in goods-sector employment from 1992 to 2012 stems from U.S. trade deficits; most of the decline is due to differential productivity growth. As the United States repays its debt, its trade balance will reverse, but goods-sector employment will continue to fall.

Notes:

Print version record

August 2013.