NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Global Imbalances and Structural Change in the United States

Timothy J. Kehoe, Kim J. Ruhl, Joseph B. Steinberg

NBER Working Paper No. 19339
Issued in August 2013
NBER Program(s):   EFG   IFM

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.

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A data appendix is available at http://www.nber.org/data-appendix/w19339

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w19339

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