U.s. Competitiveness: beyond the trade deficit.

Large trade deficits and the corresponding increase in U.S. international indebtedness have raised concerns about the long-run competitiveness of the United States. But being competitive requires more than balance in our foreign trade; it requires an improving standard of living. The long-term U.S. competitive problem is largely caused by low saving rates, high costs of capital, and the resulting inadequate level of both visible and invisible investment. As long as the U.S. national saving rate remains far below that of all our major competitor nations, there is little chance for restoring America's international economic position.

Investing in all the people.

PIP: Investing in the education of girls may well be the highest return investment available in the developing world. As such, increasing the level of female education is an especially high priority in Pakistan. This economist has examined the links between women's education and development, and argues on several fronts in support of educating girls. Worldwide, female children suffer higher levels of mortality than boys, symptomatic of a general pattern of female deprivation in the developing world, especially in South Asia. Underinvestment in girls results from parents' reluctance to invest in them because of their expectation that such investment will serve only girls' husbands and husbands' families. Women remain uneducated in this context. Experience, however, suggests that female education programs are relatively inexpensive compared to other development investments and that female enrollment rates could quickly be increased. Indeed, major initiatives to increase female education have the potential to transform society over time. Had a larger proportion of girls been educated one generation ago, millions of infant deaths annually could have been averted and tens of millions of families could have been both healthier and more content. These issues are discussed.^ieng

An aging society: opportunity or challenge?

"This paper steps back from the current political debate [in the United States] over the social security trust fund and examines the more general question of how serious a macroeconomic problem aging is and how policy should respond to it. We focus primarily on issues relating to saving and capital accumulation. We do not consider the broader question of whether the current U.S. national saving rate is too high or too low, but focus on the effect of demographic changes on the optimal level of national saving. In addition, we consider the effects of demographic change on productivity growth and the optimal timing of tax collections. Our general conclusion is that demographic changes will improve American standards of living in the near future, but lower them slightly over the very long term. Other things being equal, the optimal policy response to recent and anticipated demographic changes is almost certainly a reduction rather than an increase in the national saving rate."