Thursday, August 21, 2008

Export Boom Helps Factories Too

. Thursday, August 21, 2008

The NYT recently ran a misleading story about US exports. The Washington Post today compounded the error by publishing an opinion piece that cites the misleading Times article to justify skepticism about trade. This seems to offer the opportunity to see if I remember how to do this.

The take away point from the NY Times' story is that good news about exports is actually troubling news. For [although] "exports are the bright spot this year in an otherwise bleak economy...the world is not suddenly snapping up made-in-America goods like aircraft, machinery and staplers. The great attraction is decidedly low-luster commodities like corn, wheat, ore and scrap metal."

It turns out, however, that the world is actually buying more planes, machinery, and staplers from the US this year than it did last year. (Okay, I don't know about staplers specifically (which I don't think have been produced in the US for ten years), but consumers goods more broadly) The graph below makes this point explicitly by comparing non-agricultural exports each month in 2007 and 2008. It clearly indicates that American exports of manufactured goods are unambiguously greater in each month of 2008 than in the same month of 2007.

If you were the curious sort, you could go to the BEA website and download the data required to conduct comparisons for civilian aircraft, capital goods (machinery), and consumer goods (and maybe even automobiles). Were you to do so, you would find that in each of these categories, the world has purchased more from the US in 2008 than it did in 2007. Thus, the export boom is helping American factories, too.

International Political Economy at the University of North Carolina: August 2008




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