NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Joseph B. Steinberg

University of Toronto
Department of Economics
150 St George Street
Toronto, Ontario M5S 3G7
Canada

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Institutional Affiliation: University of Toronto

NBER Working Papers and Publications

August 2013Global Imbalances and Structural Change in the United States
with Timothy J. Kehoe, Kim J. Ruhl: w19339
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.

Published: Timothy J. Kehoe, Kim J. Ruhl, and Joseph B. Steinberg, "Global Imbalances and Structural Change in the United States," Journal of Political Economy 0, no. 0 (-Not available-): 000. https://doi.org/10.1086/696279

 
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