Globalizing America

Globalizing America

The USA in World Integration

New Horizons in International Business series

Edited by Thomas L. Brewer and Gavin Boyd

The authors address questions in current business and policy literature regarding the structural linkages evolving in the globalization process. The authors conclude that the US administration and American firms have to be more responsive to the interests of the international community that are being vitally affected by the integrating effects of transnational production and world trade.

Chapter 3: The USA in the world trading system

Sven Arndt

Subjects: business and management, international business


63 3. The USA in the world trading system Sven Arndt The USA has been an important player on the post-war world economic stage, but for much of that period what happened in the world economy was not of much consequence to the majority of the country’s citizens. Trade was, and in many ways still is, a small part of overall economic activity. To assess the importance of trade one has to go to sector- and industry-specific levels, where shifts in world demand and supply can affect wages, profits, employment and output. The public at large has a general sense that the US economy is becoming more ‘globalized’ and that this process could have important implications, but most would be hard-pressed to come up with hard evidence from personal experience. The term ‘globalization’ is used here in the broadest sense to refer to the totality of ways in which an economy becomes more integrated into the world trading system. In the realm of goods and services, this usually means that exports and imports come to make up a growing share of GNP.1 In the realm of factors of production, it means that cross-border flows of capital and labour play a rising role in domestic economic activity. In the process, domestic markets become more sensitive to developments in the world economy. In the realm of economic policy, it means that the conduct and efficacy of domestic economic policies are increasingly influenced by developments in other countries and...

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