Going Down: The Asian Crisis and U.S. Exports
The Asian financial and economic crisis has attracted much attention to the trade links among the United States and countries throughout Asia. Until the crisis, U.S. exports to East Asia were growing rapidly. In this article, the authors examine the abrupt decline in exports and provide estimates of the sizes of the export shock both to the U.S. economy as a whole and to specific sectors. More than half the industries they studied experienced declines in exports to East Asia of more than 15 percent; however, focusing solely on the export data overstates the importance of these declines for the industries in question. The effect of the decline depends on the extent to which that industry relies on the East Asian markets to sell its output. Incorporating the export declines with the market share data indicates the extent to which each industry has been affected. For most industries, the decline in exports lowered growth by 0.6 percentage points or less. For some industries, such as the nonelectrical machinery industry, the export shock reduced output by 1 percent or more.