The graph above illustrates U. S. exports of goods and services from 1929 to the present.
This might be a good time to repeat an observation I’ve made before: only the math-challenged and fantasists can believe that future U. S. economic growth can be driven primarily by exports. There are any number of reasons for this but the most important are that if U. S. global market share increased to the level that would be required it would be genuinely alarming to our trading partners who would surely take remedial action and, frankly, we’re too rich and the rest of the world isn’t rich enough.
Can exports grow? Sure. But the U. S. economy can never be as export-driven as China’s, Japan’s, or even Germany’s.
Comment.
For log fans:
First: Every country wants to be a net exporter, but barring extraterritorial contact, that isn’t possible. The US has, in general, a growing population, and a growing economy, and imports therefore help fuel future growth. This isn’t possible in say, Japan, where the population is shrinking and the economy’s growth has been slower.
Second: You sometimes hear talk of exports being a ‘buffer’ against recession – if your economy is in the tank, exports (to places whose economies presumably aren’t) act as a stabilizer. Correlation doesn’t equal causality, but this graph seems to indicate the opposite: either the economy goes into recession because of a drop of exports (unlikely in the case of the US), or a recession in the US is likely enough in an interconnected economy that a drop in exports will happen anyways.
Third: The growth after about 1970 comes at an interesting time, I think that Alan Greenspan noted that as of the mid-1970s, as GDP was rising, the ‘net weight’ of the GDP (all goods produced) was stable (and may now be declining). It’s likely that a growing proportion of those exports are services.
How will the US natural gas resurgence (and estimates for a US oil ‘renaissance’), possibly making the US a net energy exporter, change this picture?
You’re getting a little ahead of me, TimH. My next installment will be on imports. If increased U. S. gas and oil production results in fewer U. S. imports, it will be good. If it results in a tiny bit more U. S. exports, that will be good but IMO not as good.
Definitely L-shaped. We basically took a permanent hit with the Great Recession.
Another reason for the lingering employment problems IMO. Going forward we will always need less workers than prior to the the Great Recession. In economics jargon we call this a unit root problem.
Score one for Greg Mankiw, and nothing for Krugman.
Where’s the Chines currency problem?
Where’s the Chines currency problem?
My guess is that will show up on the Imports chart, especially if Schuler does Imports minus oil.