The US & Global Economic Trades
Change is a constant. The ability to change at a rate greater than or equal to that constant helps separate successful companies and countries (Kotter, 2012). The US and South Korea serve as examples of countries that have underwent transformational changes the last 50 years. While the US continues to become more specialty oriented, South Korea has completely reinvented itself from the depths of economic futility ("South korea’s education," 2013).
While the US GDP has slowed, it remains a highly sought after trade partner (in part due to consumption and economic well-being). South Korea serves as an example of how economic integration can transform a country. They have done so using their abundance of natural resources to spurn GDP growth. This growth has been reinvested back into their social and economic systems, specifically education. Doing this has created a highly educated and talented pool of human capital available for a fraction of the cost versus other countries (Tai-Hwon, 2014). This increase in human capital has further increased foreign direct investment (FDI) facilitating continued growth of trade with other countries. All this transformation has occurred while starring down democratization of the country and continued tensions with North Korea.
There are a number of intricacies associated with establishing trade partners and trade boundaries. Formal institutions such as governments and world councils establish rules of the game in an effort to create stability. This analysis will evaluate the U.S. economic institution in relation to the rest of the world and compare its growth with another growing country, South Korea. The analysis will highlight important trade partners over the last 3 years based on both export and import values. The evaluation will conclude by identifying countries that have the greatest trade surpluses with the United States.
Economic integration aims to reduce cost and increase value for both producers and consumers through increased global trading of goods and services. Economist measure the health of a country’s economy using gross domestic product (GDP). GDP represents the value of goods and services produced over a period of time (Gerber, 2011). It can be calculated using a couple of different approaches. The first is the income approach which is calculated looking at the total compensation for employees and gross profits for all business in a country. The second method is through measuring a country’s total expenditures. GDP is typically expressed as a percent difference versus another time period such as a previous year or quarter. Figure 1 represents the GDP rate for the U.S. over the last 44 years (1970 – 2014).
The U.S. GDP has averaged slightly over 2% during this period of time. Comparing this to an emerging market such as South Korea (Figure 2) which has an average GDP annual growth over 6% during the same time period...