U.S Economy Challenged Towards Emerging Markets

 The U.S economy is the largest economy in the world with one of the highest GDP per capita. This surge in the economic growth is a little contribution to U.S economic problem but not for the whole. Particularly, international trade compensated only for a small share of U.S manufacturing unemployment.

The U.S supposed to face negative economic when the unemployment rising by the free trade agreements and the surge in U.S foreign direct investment in emerging markets.

The difference between U.S and foreign economic performance during the period from 2000 to 2007 was striking. At that stage, the combination of weak U.S growth and rapid growth in emerging markets economics reduced the U.S share in global GDP by about 10 percent.

In order to face this slow income growth, they had to resort to borrowing to increase their spending. And the disappointing U.S growth performance was large trade deficits and a rapid increase in imports from developing countries. In addition, the rapid growth in the off-shoring business services providing employment to developing countries, especially India.

There is always a contradiction that the economic expansions in countries like China and India has been generally good for U.S economy. The 14 percent of Americans said that the good for the world economy is always good for the United States, but most of the people disagreed with that statement.

 

Lawrence Edwards and Robert Lawrence, the two economists said that the surge in emerging markets would always to be beneficial for both the United States and its trading partners for the hopeful future. And they argued that the declined rebound in U.S manufacturing sector just because of its traded with the developing countries.

The faster U.S export growth sustains its level by the developing countries growth and in return rising imports from developing countries shows sign of recovery of the U.S economy.