ABSTRACT
In 1977, the United States experienced a $27.7 billion trade deficit. Analysis of this deficit can best be performed in terms of the demand and supply factors that have contributed to it. The United States has been spending a smaller proportion of GNP on research and development than was true earlier. Investment in plant and equipment inescapably has a profound effect upon a country's competitiveness. Personal saving accounts for the major portion of net saving in many industrialized economies. In the United States, household savings are more than two or three times the size of corporate net savings. The age of plant and equipment indicates in an abbreviated manner the likely competitiveness of facilities. Americans typically believe that the US market is competitive and Japan's is cartelized and monopolistic, but the facts may be quite different. International trade fosters competitiveness both in exports and in imports, when imports are "independent."
