Global imbalances and structural change in the United States

Timothy Kehoe, Kim Ruhl and Joseph Steinberg

No 489, Staff Report from Federal Reserve Bank of Minneapolis

Abstract: 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.

Keywords: Trade (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-dge, nep-int, nep-lam, nep-ltv, nep-neu and nep-opm
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Citations: View citations in EconPapers (23)

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Related works:
Journal Article: Global Imbalances and Structural Change in the United States (2018)
Working Paper: Global Imbalances and Structural Change in the United States (2015)
Working Paper: Global Imbalances and Structural Change in the United States (2013)
Working Paper: Global Imbalances and Structural Change in the United States (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmsr:489

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