| Book Title | The United States and the World Economy: Foreign Economic Policy for the Next Decade |
| Book Author | Bergsten, C. Fred |
| Bibliographic Information | Peterson Institute for International Economics, 2005, Pages : 454, $26.95, ISBN 0881323802 |
Review note
The United States and the World Economy: Foreign Economic Policy for the Next Decade. By C. Fred Bergsten. Washington, D.C.: Institute for International Economics, 2005. Pp. 488. $25.95.
Reviewed by Raphael De Coninck, Global Research Fellow, NYU School of Law.
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In The United States and the World Economy, C. Fred Bergsten and his collaborators at the Institute for International Economics analyze a broad range of economic challenges facing the United States, from the rise of China to immigration in the United States. A particularly engaging part of the book is the treatment of international trade and protectionism. Drawing on existing estimates, The United States and the World Economy shows that the net benefits of global integration are substantial, but that the benefits and burdens are not evenly distributed. Itthen argues convincingly that in order to gain full political support for globalization, its negative effects must be mitigated.
Perhaps because of the large number of topics covered, The United States and the World Economy provides avenues for reflection rather than definitive answers. For instance, the book makes specific recommendations to expand the Trade Adjustment Assistance program, which provides support for workers who lose their jobs because of international trade competition. However, these recommendations do not draw enough on the rich empirical literature that evaluates labor market programs. For this very reason, the book fails to assess and compare the effectiveness of its different propositions.
However, the breadth of The United States and the World Economy is also one of its strengths. The meticulous description of key issues makes the book a reference for policymakers and anyone interested in foreign economic policy, in the United States and abroad. More fundamentally, the book, taken as a whole, demonstrates the need for domestic action in order to address foreign economic challenges. Examples of such recommendations include expanding Trade Adjustment Assistance to gain political support for free trade, reducing budget deficits to correct the current account deficit, or raising the gasoline tax and encouraging alternative energy use to counter rising oil prices. The United States and the World Economy is important precisely because of this repeated call for domestic policies in order to complement international actions.
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