Much of the criticism is aimed at two international institutions that the United States helped create and lead: the International Monetary Fund, launched after World War II to provide emergency loans to countries with temporary balance-of-payments problems, and the World Trade Organization, created in 1995 during the last round of world trade negotiations, primarily to help settle trade disputes among countries. Yet as the new century dawns, America’s increasing economic interdependence with the rest of the world, known loosely as “globalization,” has come under attack. gross domestic product at the end of the decade). Even so, during the 1990s, exports accounted for almost a quarter of the growth of output (though just 12 percent of U.S. Indeed, the influx of funds from abroad during the Asian financial crisis kept interest rates low and thereby encouraged a continued boom in investment and consumption, which more than offset any decline in American exports to Asia. Our relatively open borders, which permit most foreign goods to come in with a zero or low tariff, have helped keep inflation in check, allowing the Federal Reserve to let the good times roll without hiking up interest rates as quickly as it might otherwise have done. “competitiveness.” Productivity growth-the engine of improvement in average living standards-has rebounded from a 25-year slump of a little more than 1 percent a year to roughly 2.5 percent since 1995, a gain few had predicted.Įconomic engagement with the rest of the world has played a key part in the U.S. As the United States enters the 21st century, it stands unchallenged as the world’s economic leader, a remarkable turnaround from the 1980s when many Americans had doubts about U.S.
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