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Competitiveness Matters

Industry and Economic Performance in the U.S.

Candace Howes and Ajit Singh, Editors

Publication Year: 2000

This book argues, against the current view, that competitiveness--that is, the competitiveness of the manufacturing sector--matters to the long-term health of the U.S. economy and particularly to its long-term capacity to raise the standard of living of its citizens. The book challenges the arguments popularized most recently by Paul Krugman that competitiveness is a dangerous obsession that distracts us from the question most central to solving the problem of stagnant real income growth, namely, what causes productivity growth, especially in the service sector. The central argument is that, if the U.S. economy is to achieve full employment with rising real wages, it is necessary to enhance the competitiveness of its tradable goods sector. The book shows that current account deficits cannot be explained by macroeconomic mismanagement but are rather the consequence of an uncompetitive manufacturing sector. It finds that the long-term health of the manufacturing sector requires not only across-the-board policies to remedy problems of low or inefficient investment, but also sectoral policies to address problems that are strategic to resolving the balance of payments problems. Lessons are drawn from the experience of some European and Asian countries. This book will be of interest to economists, political scientists, and business researchers concerned with the place of the manufacturing sector in overall health of the U.S. economy, with issues of industrial policy and industrial restructuring, and with the conditions for rising standards of living. Candace Howes is Associate Professor, Barbara Hogate Ferrin Chair, Connecticut College. Ajit Singh is Professor of Economics, Queens College, Cambridge.

Published by: University of Michigan Press

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1. Introduction: Competitiveness Matters

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pp. 1-28

In a series of widely read articles and books published over the last several years, Krugman (1994, 1996) decries what he regards as a "dangerous obsession" with international competitiveness, a trend he refers to as "pop internationalism." ...

I. Trade, Macro Policy, and Competitiveness

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2. The Trade Deficit and U.S. Competitiveness

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pp. 31-67

The U.S. merchandise trade balance soared to $132 billion in 1993, the highest level since the record of $160 billion in 1987.1 Although the large trade deficits of the late 1980s were widely attributed to an overvalued dollar, the dollar has depreciated substantially since...

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3. Improving U.S. International Competitiveness: Macro Policy Management vs. Managed Trade Policy

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pp. 68-86

A classic debate among economists and policymakers is under way on how to improve U.S. competitiveness, particularly as measured in the international arena. Macroeconomists argue that U.S. international competitiveness is a function of savings and investment and the mix of fiscal and monetary policy. ...

II. Competitiveness and Financial Markets

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4. The Anglo-Saxon Market for Corporate Control: The Financial System and International Competitiveness

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pp. 89-105

This chapter was completed in 1995 at a time when there was a great deal of concern among academics as well as the business community about the international competitiveness of U.S. corporations. The MIT Commission on Industrial Productivity had found that the U.S. corporations had abandoned a whole range of industries to foreign...

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5. American Corporate Finance: From Organizational to Market Control

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pp. 106-124

Over time, the innovation process and the learning process that is its social substance have become increasingly collective and cumulative, and hence organizational (O'Sullivan 1996; Lazonick and O'Sullivan 1996b). Our perspective on industrial development identifies organizational integration and financial commitment as the social conditions...

III. Competitiveness and Technology Policy

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6. Can Technology Policy Serve as Industrial Policy?

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pp. 127-144

In the 1990s, U.S. policymakers have formally placed technology policy on the national economic agenda. With accession of Clinton to the presidency, initiatives begun by the Congress, the Department of Defense's Defense Advanced Research Projects Agency, and Bush's science adviser have grown into multibillion dollar programs for dual...

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7. Does the United States Need a Technology Policy?

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pp. 145-162

The unchallenged U.S. position of industrial and technological leadership in the three decades following World War II has dissipated over the past two decades, leaving U.S. firms to make their way in a world where foreign competitors have the capital, human resources, and government support necessary to prevail in competitive struggles with U.S. industry. ...

IV. Competitiveness and Industrial Policy

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8. A High-Road Policy for U.S. Manufacturing

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pp. 165-179

A series of epoch-making (or, more accurately, epoch-ending) events in the early 1970s changed U.S. manufacturing forever. The freeing of the dollar from gold in 1971 and the sudden (albeit temporary) jump in the prices of oil and other energy feedstocks are the macroeconomic highlights, but not the decisive changes for companies that made manufactured...

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9. U.S. Competitiveness and Economic Growth

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pp. 180-205

In the introduction to this book, Howes and Singh (1999) argued that there are good analytical and empirical reasons for the view that relative productivity growth and the relative competitiveness of a country's export sector matter profoundly to its overall economic performance. ...

Contributors

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pp. 207-


E-ISBN-13: 9780472027408
E-ISBN-10: 0472027409
Print-ISBN-13: 9780472109838
Print-ISBN-10: 0472109839

Page Count: 216
Illustrations: 18 drawings, 19 tables
Publication Year: 2000

Research Areas

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Subject Headings

  • Industrial policy -- United States.
  • Manufacturing industries -- Government policy -- United States.
  • Technological innovations -- Economic aspects -- United States.
  • Balance of trade -- United States.
  • Competition, International.
  • United States -- Commercial policy.
  • United States -- Economic policy -- 1993-2001.
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