The OPEC Surplus and U.S.-LDC Trade
This paper explores the connections between the shift of world saving toward OPEC and the changing structure of U.S. trade with the non-oil developing countries. The basic point of the paper is that during the 1970s the U.S. economy has become more interdependent through trade with the newly industrializing countries (NICs) in the developing world. The shift of world saving toward OPEC in the 1970s effectively internationalized the supply of saving, as OPEC places its surplus in the international financial system. The NICs and other developing countries borrow the surplus and direct it to domestic investment. Investment in the NICs stimulates the demand for U.S. capital goods. The reallocation of resources towards capital goods production in the U.S. stimulates excess demand for consumer goods, which appear as imports from the NICs. U.S. exports of capital goods to these countries have grown rapidly in the 1970s as have U.S. imports of non-food, non-auto consumer goods from them. Thus the structure of U.S. trade has been reoriented to become complementary with the rapidly- growing developing countries, and perhaps more competitive with Europe and Japan.
|Date of creation:||Oct 1981|
|Date of revision:|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lewis, Arthur, 1979.
"The Slowing Down of the Engine of Growth,"
Nobel Prize in Economics documents
1979-2, Nobel Prize Committee.
- David Lipton & Jeffrey Sachs, 1980. "Accumulation and Growth in a Two-Country Model: A Simulation Approach," NBER Working Papers 0572, National Bureau of Economic Research, Inc.
- William H. Branson & Julio J. Rotemberg, 1981.
"International adjustment with wage rigidity,"
in: International Seminar on Macroeconomics, pages 309-332
National Bureau of Economic Research, Inc.
- William H. Branson & Julio J. Rotemberg, 1991. "International Adjustment with Wage Rigidity," NBER Chapters, in: International Volatility and Economic Growth: The First Ten Years of The International Seminar on Macroeconomics, pages 13-44 National Bureau of Economic Research, Inc.
- Branson, William H. & Rotemberg, Julio J., 1980. "International adjustment with wage rigidity," European Economic Review, Elsevier, vol. 13(3), pages 309-332, May.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:0791. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.