The Visible Hand of U.S. Deindustrialization

Abstract

In recent years, the U.S. manufacturing sector has seen both its share of output and total employment decline, a problematic trend given the manufacturing economy’s essential contribution to economic growth, prosperity and macroeconomic stability. The empirical evidence indicates that manufacturing’s decline is attributable to a specific set of economic policies. Hence, there are clear policy measures that could be taken to address the manufacturing sector’s decline and to stabilize growth prospects for the U.S. economy.