Edited by Alan M. Rugman and Gavin Boyd
Chapter 3: American structural and policy interdependencies
Gavin Boyd The most extensive structural interdependencies in the world economy are those of the USA, and they are being expanded mainly by the entrepreneurial dynamism of US firms, using resources derived from strengths in the large home market and from major positions in world markets. The US enterprises operate very independently, in competition with each other and with foreign rivals, while relating distantly to their national administration; its established policy orientation is liberal, and accordingly there is little structural policy activism. Very large trade deficits, however, pose structural policy issues. Policy interdependencies with complex dimensions result from the structural interdependencies, and on a broader scale from the interacting effects of US and foreign policy mixes. In the management of these policy interdependencies the USA is advantaged by the size of its advanced economy, its capacity to relate separately to the European Union and Japan, and its attraction, as a high growth state, for foreign investors and foreign exporters; it is also advantaged as the top currency state of the world economy, and as the home base of most of the world’s leading financial enterprises. The USA’s structural interdependencies have evolved with imbalances, due to what may be considered coordination problems. Functionally, and politically, the most significant imbalance is a high and unsustainable trade deficit, which is part of a current account problem resulting principally from large-scale foreign production by US firms, for both external markets and the home economy, and from foreign sourcing by US enterprises for the home...
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