Tuesday, April 6, 2010

The Economist: U.S. is Changing its Economic Behavior: Export or Die

According to The Economist is changing is "debt and consumption" model to "export and save", which would be the biggest transformation in decades. The crisis has caused people to have less money, and thus they spend less. Banks are also lending less.

The article mentions that companies will increasingly have to look outside the U.S. (a low dollar will do wonders). The key for the U.S. will be to export more expensive products and services as opposed to labor-intensive ones (such as clothing.

Countries that recovered due to exports include Sweden, Finland, Thailand, Malaysia, and South Korea. For the U.S., however, it will be a lot harder due to its size and its fragile economy. Even so, the only way is exports: "To export or to die".

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