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U.s. Competitiveness: beyond the trade deficit
Science (New York, N.Y.)
|July 15, 1988
Summary
Low U.S. saving rates and high capital costs hinder national competitiveness. Improving the standard of living and international economic position requires increasing the U.S. national saving rate to match competitor nations.
Area of Science:
- Economics
- International Trade
- National Competitiveness
Background:
- Concerns exist regarding the long-run competitiveness of the United States due to large trade deficits and increasing international indebtedness.
- National competitiveness is defined not only by foreign trade balance but also by an improving standard of living.
Purpose of the Study:
- To identify the primary causes of the long-term U.S. competitive problem.
- To assess the impact of saving rates and investment levels on U.S. international economic standing.
Main Methods:
- Analysis of U.S. trade deficits and international indebtedness.
- Examination of factors contributing to the U.S. competitive problem, including saving rates and capital costs.
- Comparative analysis of U.S. national saving rates with those of major competitor nations.
Main Results:
- Low national saving rates and high costs of capital are identified as key drivers of the U.S. competitive issue.
- Inadequate levels of visible and invisible investment are a direct consequence of low saving rates and high capital costs.
- The U.S. national saving rate significantly lags behind those of major competitor nations.
Conclusions:
- Restoring America's international economic position is unlikely without a substantial increase in the U.S. national saving rate.
- Addressing low saving rates and high capital costs is crucial for enhancing U.S. competitiveness and ensuring an improving standard of living.
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