4 ms·
The extra supply is balanced by the extra demand only if exports are zero. I.e. demand for Apple devices won't increase by 10% if the US population grows by 10%
by deogeo 8y ago
The extra supply is balanced by the extra demand only if exports are zero. I.e. demand for Apple devices won't increase by 10% if the US population grows by 10%. And of course making 10% more rarely requires 10% more workers - you need more on the assembly line, but not more to design the items.
- gregwtmtno 8y agoThose are points I hadn't considered, but what in the US, net exports are negative. Wouldn't that imply the converse effect to what you're describing?
- deogeo 8y agoIt wouldn't. Say someone in the US buys something made in China - how does that increase demand for labor in the US? There's some marginal US labor required for the last part of the transport, but that's it.
- pas 8y agoThough thanks to the bigger market the prices can actually decrease, so living standards could increase, even if wages haven't.
- thfuran 8y agoOnly if they wouldn't have bought it if they hadn't moved to the US.
- ultraluminous 8y agoThee last part of the transport is not marginal in the real world. Increased local consumption drives transport, retail, marketing, etc. etc. Real life economic modeling is not a simple supply/demand, widgets made/sold chart.
- ebog 8y agoThe person pays for the good in US dollars. Where do those dollars go? The Chinese people who now have USD either spend or invest them back in the US.
- raincom 8y agoMost of the dollars go as profit for the multi nationals. The remaining (very minimal) goes to the contract manufacturers.
- greeneggs 8y agoThis is a rather poor argument. US exports in total are only ~13% of GDP. The trade deficit is only ~2 or 3% of GDP. That's a tiny secondary effect.