Global Imbalances and Structural Change in the United States
Since the early 1990s, as the United States has borrowed from the rest of the world, employment in U.S. goods-producing sectors has fallen. Using a dynamic general equilibrium model, we find that rapid productivity growth in goods production, not U.S. borrowing, has been the most important driver of the decline in goods-sector employment. As the United States repays its debt, its trade balance will reverse, but goods-sector employment will continue to fall. A sudden stop in foreign lending in 2015-2016 would cause a sharp trade balance reversal and painful reallocation across sectors, but would not affect long-term structural change.
You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.
A data appendix is available at http://www.nber.org/data-appendix/w19339
Document Object Identifier (DOI): 10.3386/w19339
Users who downloaded this paper also downloaded these: