Mandel, Michael J. THE NEW BUSINESS CYCLE (Business Week, no. 3520, March 31, 1997, pp. 58-68)

High technology has replaced the housing, automobile, and other traditional industries as the primary force for U.S. economic growth. Hence, a downturn in that sector could have dire consequences for the stock market, warns Economics Editor Michael J. Mandel. Recent drops in technology stock prices may indicate an incipient slowdown in that sector, he notes, or "a mere blip in a remarkable upward trajectory." A decline in domestic high-technology sales could be cushioned by rising foreign demand for U.S. products, particularly in the new markets of India and other developing countries, as well as in Europe after completion of telecommunications deregulation, Mandel says.

Bhagwati, Jagdish N. FEAR NOT: THE GLOBAL ECONOMY AND AMERICAN WAGES (The New Republic, vol. 216, no. 4296, May 19, 1997, pp. 36-41)

Bhagwati identifies two basic reasons for distress in the U.S. workplace: the decline in the real wages of unskilled workers, and the feeling among workers that they can't really improve their situation in life. Part of the distress comes from unrealistically high expectations that the growth of the 1950s and 1960s would continue uninterrupted, Bhagwati says. The challenges of the global economy can be met, he says, if the power of government is used to retrain and assist those dislocated by economic competition.

Krueger, Anne O. TRADE POLICY AND ECONOMIC DEVELOPMENT: HOW WE LEARN (The American Economic Review, vol. 87, no. 1, March 1997, pp. 1-22)

Stanford University's Anne O. Krueger examines the dramatic changes in developing countries' trade policies over the past 40 years and the similarly dramatic changes in conventional wisdom on trade and economic development. In the article, which is the text of Krueger's Presidential Address to the 1997 American Economic Association meeting, she traces the evolution of the import-substitution model from its theoretical origins to its widespread use and final demise. She analyzes why a theory so at odds with the widely accepted economic concept of comparative advantage gained such support among professional economists.

Garten, Jeffrey. TROUBLES AHEAD IN EMERGING MARKETS (Harvard Business Review, vol. 75, no. 3, pp. 38-50)

The lack of "democratic capitalism" may sidetrack some of the so-called big emerging markets, says the author, a former Under Secretary of Commerce for International Trade who supported the Clinton Administration's focus on expanding U.S. trade with 10 big emerging markets (BEMs) in Asia, Africa, and Latin America. After taking the first major steps toward opening domestic markets, several BEM governments face domestic challenges that could lead to the election of new governments, possibly with different policies. Such setbacks to BEM liberalization could affect the export growth of the industrialized countries that increasingly rely on these markets for sales and even financing of pensions.

Srodes, James. NEITHER FREE TRADE NOR FAIR (World Trade, vol. 10, no. 4, April 1997, pp. 20-24) There has been a "schizophrenia" in U.S. trade policy in the post-war period, says the author. On one hand, the U.S. government has actively and successfully promoted worldwide trade liberalization. At the same time, it has used trade as a way to dispense favors and, through trade laws and trade agreements, sought to bully other countries into accepting U.S. notions of what proper trade balances should be. The policy has not eliminated the chronic U.S. trade deficit because it does not address its causes.

The annotations above are part of a more comprehensive Article Alert offered on the home page of the U.S. Information Service.