ABSTRACT
The Reagan administration has pressed hard for an approach to the international economic agenda that gives greater play to market forces and the role of the private sector. The linchpin of the Reagan program was the Economic Recovery Act of 1981, which mandated a three-year, 25 percent tax cut and provided significant new incentives for business investment. The impetus given to private sector growth has altered the political, economic, and psychological setting in the United States (US). European economies themselves vary so widely in size, structure, performance, and policy outlook—and the differences between any of them and the US are so wide—that one can at best suggest a US example. The economic profile of the Pacific Basin has eclipsed that of Europe because the Pacific rim is widely regarded by Americans as both a region of greater opportunity and a more severe competitive threat.
