GROWTH RATE OF THE CAPITAL-LABOR RATIO Sources: U.S. Department of Labor, Bureau of Labor Statistics U.S. Department of Commerce, Bureau of Economic Analysis Organization for Economic Cooperation and Development Source: George Hatsopoulous, Paul Krugman and Larry Summers, "Beyond the Trade Deficit," op. cit. Source: Economic Report of the President, 1987 Source: The Cuomo Commission Report (Simon and Schuster, 1988). a These estimates of the electronics trade balance are based on Department of Commerce numbers reported in the 1988 edition of Industrial Outlook. Because of the exclusion of many kinds of electronics products, such as electronic componentry other than semiconductors, and consumer electronics products other than radios, televisions and related products such as VCRs, these estimates are based on a narrow definition of the electronics sector. A broader definition, such as the one used in Figure 4, suggests a much larger trade imbalance in electronics. Both definitions show the U.S. trade position deteriorating over time even on computers, an area in which the U.S. has a technological and competitive advantage. 62 FIGURE 1 New P&E Expenditures by Business-Manufacturing as a % of GNP 88:2 & 88:3 based on planned expenditures published by the BEA. Assumed 7% GNP growth in 3rd qtr. of '88 4 quarter moving average The sharp appreciation of the dollar not only depressed exports; it also squeezed the manufacturing investment share of GNP. Source: David Hab, Kemperer Financial Services. |