TY - JOUR
T1 - Global imbalances and structural change in the United States
AU - Kehoe, Timothy J.
AU - Ruhl, Kim J.
AU - Steinberg, Joseph B.
N1 - Publisher Copyright:
© 2018 by The University of Chicago. All rights reserved.
PY - 2018/4
Y1 - 2018/4
N2 - Since the early 1990s, as the United States borrowed heavily from the rest of the world, employment in the US 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 US 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.
AB - Since the early 1990s, as the United States borrowed heavily from the rest of the world, employment in the US 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 US 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.
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U2 - 10.1086/696279
DO - 10.1086/696279
M3 - Article
AN - SCOPUS:85043493580
SN - 0022-3808
VL - 126
SP - 761
EP - 796
JO - Journal of Political Economy
JF - Journal of Political Economy
IS - 2
ER -
