The Impact of the Asia Crisis on U.S. Industry: An Almost-Free Lunch?

[...]Although the overall effects of the Asia crisis on the UnitedStates were modest, they could have obscured other, largereffects in particularly vulnerable U.S. industries. Accordingly,this article looks beyond the aggregate data associated with thecrisis and instead focuses on these potentially larger effects atthe sector level. It arrives at four key findings. First, dollarprices of imports from the Crisis 4 countries fell substantiallyafter the currency collapses of summer 1997. In a few cases, thedrops were accompanied by a fall in U.S. relative output prices.Second, most U.S. industries experienced a decline in exportsto Asia, but in no case was the decline in export demand bigenough to have a noticeable impact on the trend in U.S.shipments. Third, in only a few cases was there a sharp rise inimport volumes resulting from the crisis. And finally, in onlyone case—the steel industry—was there clear evidence of a pattern of rising imports, falling exports, and an associateddrop in domestic prices and employment.[...]