Deindustrialization from the Center Perspective: US Trade and Manufacturing in the Last Two Decades

Nikolaos Rodousakis, Giuliano Toshiro Yajima and George Soklis

Economics Working Paper Archive from Levy Economics Institute

Abstract: We argue that the US trade and industry sector has experienced several unsustainable sectoral processes, including (i) a fall in the trade balance in machinery and equipment and high-tech (HT) industries, (ii) a rise in import multipliers in machinery and equipment and HT industries, (iii) a fall in the manufacturing share of GDP in machinery and equipment and HT industries, (iv) a rise in commodities share of GDP, (v) a fall in the wage share, (vi) structural shifts in the consumption share of wages, and (vii) a fall in employment multipliers for the US, particularly in manufacturing. To address these issues, the US must shift toward a more sustainable and value-added economy with a focus on innovation and investment in high-tech industries, renewable energy, and sustainable agriculture. Additionally, policies must be put in place to address the negative impacts of resource extraction and to promote a more equitable distribution of income and wealth.

Keywords: Input–Output Analysis; Industrial Policy; Income distribution (search for similar items in EconPapers)
JEL-codes: C67 D33 D57 O25 (search for similar items in EconPapers)
Date: 2024-05
New Economics Papers: this item is included in nep-hme
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