>Brad De Long wrote: > > > Imports from non-industrial-core countries equal to 3% of GDP--most > > of which have potential domestic substitute producers who are not > > *that* much more costly... > >Are you sure of what you just wrote? With far reaching mechanization, I >suspect that we would not loose too much by producing textiles in the U.S., >but what about raw materials? Think of how sensitive the economy seems to be >to oil prices. There is a difference between short run and long run. Short-run a big rise in the price of oil is very disruptive. In the long run the U.S. has lots of coal, lots of shale... Now access to the U.S. market is very important for Mexico, Thailand, India, et cetera. But imports from LDCs are such a small part of GDP, and if there is one thing that market economies are good at finding it is substitutes...
