Page 115 - Economics

CONFIRMING PAGES

PART ONE
86
Introduction to Economics and the Economy
TABLE 5.1 Exports of Goods and Services as a Percentage exports and imports were 11 and 16 percent of GDP, re-
of GDP, Selected Countries, 2005 spectively, in 2005.
Even so, the United States now accounts for a dimin-
Exports as Percentage
Country of GDP ished percentage of total world trade. In 1950, it supplied
about one-third of the world’s total exports, compared with
Belgium 87
about one-eighth today. World trade has increased more
Netherlands 71
rapidly for other nations than it has for the United States.
South Korea 44
But in terms of absolute volumes of imports and exports,
Germany 40
the United States is still the world’s leading trading nation.
Canada 38
New Zealand 28
Italy 27 Dependence The United States is almost entirely
France 26 dependent on other countries for bananas, cocoa, coffee,
United Kingdom 26 spices, tea, raw silk, nickel, tin, natural rubber, and dia-
Spain 25 monds. Imported goods compete with U.S. goods in many
Japan 13 of our domestic markets: Japanese cameras and cars,
United States 11 French and Italian wines, and Swiss and Austrian snow
skis are a few examples. Even the “great American pas-
Source: Derived by authors from IMF, International Financial Statistics, 2006.
time” of baseball relies heavily on imported gloves and
baseballs.
both absolutely and relative to their GDPs. A comparison Of course, world trade is a two-way street. Many U.S.
of the boxed data in Figure 5.2 reveals substantial growth industries rely on foreign markets. Almost all segments of
in the dollar amount of U.S. exports and imports over the U.S. agriculture rely on sales abroad; for example, exports
past several decades. The graph shows the rapid growth of of rice, wheat, cotton, and tobacco vary from one-fourth
U.S. exports and imports of goods and services as percent- to more than one-half of the total output of those crops.
ages of GDP. On a national income account basis, U.S. The U.S. computer, chemical, semiconductor, aircraft,

FIGURE 5.2 U.S. trade as percentage of GDP. U.S. imports and exports have increased in volume and have greatly increased as a
percentage of GDP since 1975.
18
1975 2005
Exports $225 Exports $1195
16 Imports $227 Imports $1828

Billions of 2000 dollars Imports of
14 goods and
services
Percentage of GDP 12

10

8
Exports of
goods and services
6

0
1975 1980 1985 1990 1995 2000 2005
Year
Source: Bureau of Economic Analysis. Data are compiled by the authors from the national income accounts and are adjusted for inflation (2000 dollars).

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