The USA in World Integration
Edited by Thomas L. Brewer and Gavin Boyd
Chapter 3: The USA in the world trading system
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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