MAPI Report assesses trade imbalance.
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Press Release Summary:
According to "Unwinding the U.S. Trade Imbalance" report written by MAPI Chief Economist, Daniel J. Meckstroth, Ph.D., U.S. deficit is unsustainable at its current share of economic growth as it already absorbs nearly 3/4 of world's current account surpluses. Readjustment process will likely include further decline in the dollar; increase in personal savings rate of U.S. consumers; and global rebalancing of supply and demand that will include major countries and regions.
Original Press Release:
MAPI Report Assesses Trade Imbalance
Global trade is increasingly imbalanced, with the United States running a huge current account deficit while Asia and the oil exporting countries maintain large and persistent surpluses.
In Unwinding the U.S. Trade Imbalance (ER-649e), MAPI Chief Economist Daniel J. Meckstroth, Ph.D., provides some answers as to when and how lopsided the U.S. current account balance will unwind. The report argues that the U.S. deficit is unsustainable at its current share of economic growth as it already absorbs nearly three-fourths of the world's available current account surpluses.
A readjustment process will likely include some further decline in the dollar; an increase in the personal savings rate of U.S. consumers; and a global rebalancing of supply and demand that will include the major countries and regions of the world. The ongoing unwinding of the trade imbalance will benefit the manufacturing sector primarily through strong growth in export orders.
A MAPI input-output simulation finds that a 10 percent increase in inflation-adjusted exports raises overall manufacturing-adjusted output by 2.3 percent. There is, however, a relatively wide spectrum in terms of specific industries' sensitivity to exports. The paper includes a convenient table listing this export sensitivity in 37 manufacturing industries.
The report is available at no charge for MAPI members while other purchasers may order the publication for $50 by clicking here. Orders also may be placed by contacting Mary Pearson, Publications and Accounting Assistant at (703) 647-5139 or via email to
