Most economists thought the fluctuating dollar would in time eliminate the trade deficit (as the American dollar fell, U.S. exports would become cheaper and thus more competitive; more costly imports would be reduced). The trade deficits, however, continued, and the dollar fluctuated wildly. Finally in the 1980s many economists recognized that floating exchange rates were not the answer, but attempts at currency stabilization proved difficult. Foreign markets for American agricultural products had been lost in periods of the strong dollar and were hard to recapture. As U.S. imports of manufactured goods increased, numerous discussions focused on America’s competitive position. Demands mounted for protectionism – to save jobs. The 1988 Omnibus Trade and Competitiveness Act allowed the president to impose sanctions on individual nations that engaged in unfair trade practices.

In the 1970s and 1980s, Americans groped for ways to become more competitive in the world economy and, in turn, to deal with the persistent excess of goods imports over exports. The continuing trade imbalance, particularly with Japan, spurred controversy. Was it the fault of Americans: low productivity increases, absence of goods desired abroad, lack of attention to exports? Was it that the dollar had not declined sufficiently to make U.S. goods attractive to foreign buyers? Or, was it that America’s trading partners acted in ways that were prejudicial to U.S. exports? Perhaps it was all of these. Clearly, however, American producers and consumers chose to buy imports, often preferring goods made abroad to those manufactured at home. The rise of imports relative to exports was critical to the trade deficit.

Mira Wilkins

EXERCISES

Exercise 1. Say if each of the following statements is true or not.

1. In the 19^>th century America was a net exporter of merchandise.

2. In the early 20^>th century America imported grain and mineral products.

3. U.S. exports increased after WWI and WWII.

Exercise 2. Answer the questions.

1. How did high tariffs and duties influence American economy in the late 19^>th century?

2. When did the U.S. exports reach the highest level?

3. How can you describe world economy in 1920s through 1930s?

4. How did WWII influence international trade?

5. In what way did the U.S. promote international trade?

6. How did the fall of trade barriers influence the U.S. economy?

Exercise 3

1. How do you understand the term «net importer»?

2. Are high tariffs and duties beneficial to a country’s economy?

3. Under what circumstances would you recommend to introduce trade barriers in your countries?

Exercise 4. Translate into English.

1. Главной статьей экспорта этой страны является хлопок-сырец. 2. Для защиты внутреннего рынка были введены высокие тарифы и таможенные пошлины. 3. Наиболее характерным для роста американского экспорта был рост экспорта промышленных товаров. 4. Экспорт всегда превышал импорт, и внешнеторговый баланс всегда оставался положительным. 5. Большинство экономистов полагало, что плавающий курс доллара со временем ликвидирует внешнеторговый дефицит. 6. Для экономики страны были характерны низкие темпы роста производительности, отсутствие товаров, пользующихся спросом за границей, и недостаточное внимание к экспорту.

In the relationship between government and the economy, ideas influence policies and policies shape outcomes. This three-way connection is sometimes direct, sometimes tenuous, sometimes perverse. Of the three elements, the easiest to evaluate historically is outcomes. By almost any measure, the American economy is the most successful the world has ever known. Even in colonial times the standard of living was generally better in America, at least for whites, than in Europe or Asia. In the decades following the American Revolution, economic growth remained high and remarkably steady. By the end of the nineteenth century, the United States surpassed all other countries in both agricultural and industrial output.