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Global Economic Integration

Global Economic Integration

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Finally, the American economy was more closely intertwined with the global economy than it ever had been. Clinton, like his predecessors, had continued to push for elimination of trade barriers. A North American Free Trade Agreement (NAFTA) had further increased economic ties between the United States and its largest trading partners, Canada and Mexico. Asia, which had grown especially rapidly during the 1980s, joined Europe as a major supplier of finished goods and a market for American exports. Sophisticated worldwide telecommunications systems linked the world's financial markets in a way unimaginable even a few years earlier.

While many Americans remained convinced that global economic integration benefited all nations, the growing interdependence created some dislocations as well. Workers in high-technology industries -- at which the United States excelled -- fared rather well, but competition from many foreign countries that generally had lower labor costs tended to dampen wages in traditional manufacturing industries. Then, when the economies of Japan and other newly industrialized countries in Asia faltered in the late 1990s, shock waves rippled throughout the global financial system. American economic policy-makers found they increasingly had to weigh global economic conditions in charting a course for the domestic economy.

Still, Americans ended the 1990s with a restored sense of confidence. By the end of 1999, the economy had grown continuously since March 1991, the longest peacetime economic expansion in history. Unemployment totaled just 4.1 percent of the labor force in November 1999, the lowest rate in nearly 30 years. And consumer prices, which rose just 1.6 percent in 1998 (the smallest increase except for one year since 1964), climbed only somewhat faster in 1999 (2.4 percent through October). Many challenges lay ahead, but the nation had weathered the 20th century -- and the enormous changes it brought -- in good shape.

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This article is adapted from the book "Outline of the U.S. Economy" by Conte and Carr and has been adapted with permission from the U.S. Department of State.

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