Demand and Defective Growth Patterns: The Role of The Tradable and Non-Tradable Sectors in an Open Economy

This paper examines the underlying structural elements of US growth patterns, pre- and post-crisis. Prior to the recession, the US economy exhibited a defective growth pattern driven by outsized domestic demand. As domestic aggregate demand retreats to more sustainable levels relative to total incom...

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Published in:The American economic review 2014-05, Vol.104 (5), p.272-277
Main Authors: Hlatshwayo, Sandile, Spence, Michael
Format: Article
Language:English
Subjects:
Aggregate demand
Balance sheets
Consumption
Cost control
Demand
Developing countries
DEVELOPING COUNTRY LESSONS FOR ADVANCED ECONOMY GROWTH
Economic growth
Economic recessions
Economic recovery
Economic theory
Employment
Exports
GDP
Global economy
Gross Domestic Product
Growth theory
Imports
International economics
LDCs
Open economies
Productivity
Public sector
Recession
Studies
Supply side economics
Sustainable economies
Technology transfer
Trends
U.S.A
Value
Value added
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cites cdi_FETCH-LOGICAL-c392t-4440a018fed60bc81467d1aa344cbf2487248175aca0746d39839c8c856216d43
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Spence, Michael
description This paper examines the underlying structural elements of US growth patterns, pre- and post-crisis. Prior to the recession, the US economy exhibited a defective growth pattern driven by outsized domestic demand. As domestic aggregate demand retreats to more sustainable levels relative to total income, the tradable side of the economy is a catalyst for restoring strong growth. A structural rebalancing is already underway; although it is only a third of the economy, the tradable sector generated more than half of gross gains in value-added since the start of the recovery. However, distributional issues loom on the horizon.
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subjects Aggregate demand
Balance sheets
Consumption
Cost control
Demand
Developing countries
DEVELOPING COUNTRY LESSONS FOR ADVANCED ECONOMY GROWTH
Economic growth
Economic recessions
Economic recovery
Economic theory
Employment
Exports
GDP
Global economy
Gross Domestic Product
Growth theory
Imports
International economics
LDCs
Open economies
Productivity
Public sector
Recession
Studies
Supply side economics
Sustainable economies
Technology transfer
Trends
U.S.A
Value
Value added
title Demand and Defective Growth Patterns: The Role of The Tradable and Non-Tradable Sectors in an Open Economy
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