In This Review

Rising Tide: Is Growth in Emerging Economies Good for the United States?
Rising Tide: Is Growth in Emerging Economies Good for the United States?
By Lawrence Edwards, Robert Z. Lawrence
Peterson Institute for International Economics, 2013, 176 pp
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The authors answer the question in their subtitle with an empirically rich and closely reasoned yes. It is theoretically possible that economic growth in some countries will worsen the economic well-being of their trading partners, and some commentators have suggested that the success of today’s emerging markets, especially China, has been detrimental to the United States and other rich countries. That might be true if the global economy had experienced an overall reduction in trade, but that has not occurred, except briefly during the financial crisis of 2008 and the subsequent recession. Growth in emerging markets could also hurt rich countries by raising their import prices relative to their export prices. Although that has happened from time to time, especially with regard to oil prices, on balance, import prices have fallen. Edwards and Lawrence undertake a painstaking and detailed examination of the influence in recent decades of foreign trade on U.S. employment, wages, and income distribution. Their bottom line is that Americans should welcome the growing prosperity of their trading partners.