ABSTRACT
The distribution of Eximbank direct loans among industries is highly concentrated among a small group of capital goods. The subsidy inherent in Eximbank direct loans is the most controversial attribute of the Bank's programs. The assignment of a market interest rate poses problems in the subsidy calculation. The variation among the different interest rate series, and spreads over Eximbank rates, will produce a broad variation in the amount of subsidy. The characteristics of the industries that the Bank supports give some indication of their role in US export competitiveness and performance relative to other sectors. In the case of a retaliatory subsidy such as Eximbank lending, the effect is in principle to restore what would have been the allocation of production without the intervention of foreign subsidies. The technically sophisticated nature of most capital equipment suggests that the exports supported by Eximbank direct lending are among the more advanced US industries.
