if we think of the United States as bearing a proportionate share, and also use the rule of thumb that one point of GDP = 1 million jobs, we’re looking at 1.4 million U.S. jobs lost due to Chinese mercantilism.
Bear in mind this is not a formal result, simply a very rough estimate put forth on his blog for discussion, not a formal research paper.
A couple of IMF researchers estimated China accounts for 0.9% of GWP (gross world product).
Since China's GDP is heavily export driven, Krugman asserts one can look at this as a negative impact on world exports., which in turn, negatively impacts purchases of goods and services from U.S. providers and this is a multiplier effect.
Good job Krugman. On George Stephanopoulos' show, Krugman amplified a much needed new term for the state of the economy, purgatory!
We've got a problem with terminology because we usually say either the economy is in recession or the economy is recovering. Either you're in hell or you're in heaven. And the trouble is we're actually in purgatory. We're actually in a situation almost for sure GDP is growing; almost for sure the business cycle leading committee will eventually decide the recession ended this summer. But almost surely also we're still losing jobs. The unemployment rate is going to continue to rise. So we're in that infamous jobless recovery state.
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