Long-Run Aggregate Supply, Essay Example

In order to increase its long-term aggregate supply and to stimulate economic growth, the United States should invest its resources in the creation of manufacturing jobs that create products for which there is international demand.  Without the creation of new services and products that appeal to trading partners, we cannot meet international demand. The United States should focus on manufacturing products that are in high demand both at home and overseas. At home, there is high demand for new technology such as the iPad, whose parts are currently manufactured elsewhere. The United States should also focus on products that are in high demand in its trading partners overseas. Japan, for instance, has become quite wealthy and its imports are increasing substantially. Indeed, according to The Business Mirror, total merchandise imports in Japan increased by a substantial 31 percent (Ordinario).

Particularly important to Japan are food imports. According to The Japan Times, “Japan needs imports to keep itself fed.” By manufacturing more food products geared toward Japanese markets, the United States could meet Japan’s dire need for food, while stimulating its own economy (Nagagta). The United States should also invest in manufacturing products that appeal to similar wealthy trading partners. Particularly important to the success of the United States is trade with China which has risen substantially over the last five years. Because the United States has been so successful in this market, it should seek to expand trade and to create products for which there is high demand in China.  These products include machinery, high-technology and agricultural products, including tobacco.

It is true that investing in American manufacturing jobs is not necessary for the country to be able to create products in order to trade with other countries. Currently, the United States owns and trades products made outside its borders. However, manufacturing products within the United States will help supply the demand for American made goods within the country and will create more American jobs that will put more money into American pockets, which will be used to stimulate the American economy.

Works Cited

Nagagta, Kazuaki. “Japan needs imports to keep itself fed.” 26 February 2008. The Japan Times. 27 July 2010 <http://search.japantimes.co.jp/cgi-bin/nn20080226i1.html>.

Ordinario, Cai U. “January-to-May imports up 35% on recovery.” 27 july 2010. Business Mirror. 27 July 2010 <http://businessmirror.com.ph/index.php?option=com_content&view=article&id=28145:january-to-may-imports-up-35-on-recovery&catid=23:topnews&Itemid=58>.