The Washington-based independent research organization, the Institute for International Economics, says the United States is the principal beneficiary of what is called globalization, the trade and investment-driven integration of the world economy.
In a new study institute director Fred Bergsten says the standard of living of the United States is significantly boosted by globalization. Globalization, he says, has increased average household incomes by $9000. Overall, says Mr. Bergsten, globalization raises American living standards by $1 trillion per year. The benefits come mostly from lower prices, efficiencies, and technological advances.
The principal author of the report, researcher Gary Hufbauer, says the conclusions are counter-intuitive since many Americans believe they are losers, not winners, from globalization.
"The American public generally thinks of globalization on the loss side and not on the gain side and thinks of it as a favor to foreigners and not a favor to themselves,” said Mr. Hufbauer. “And we're trying to correct that widespread misimpression."
Institute director Bergsten says further liberalization of trade and investment would similarly bring benefits to the United States.
"This [study] suggests that the gains are overwhelmingly bigger, 20 to one benefits to costs, even 10 to one going forward from additional possible gains,” he noted. “So that, in the aggregate at least, we hope that this adds to the weight of evidence that would coalesce around the case for globalization and in particular further liberalizing policies."
The study on globalization is contained in a new book released by the Institute entitled, The United States in the World Economy, Foreign Economic Policy for the Next Decade.
