The rise of China and the future of US manufacturing

Daron Acemoglu, David Autor, David Dorn, Gordon H. Hanson, Brendan Price 28 September 2014

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The end of the Great Recession has rekindled optimism about the future of US manufacturing. In the second quarter of 2010 the number of US workers employed in manufacturing registered positive growth – its first increase since 2006 – and subsequently recorded ten consecutive quarters of job gains, the longest expansion since the 1970s.

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Topics:  International trade

Tags:  manufacturing, US, China, value added

Outsourcing and the shift from manufacturing to services

Giuseppe Berlingieri 25 September 2014

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How much of the structural transformation of modern economies from manufacturing to services is a shift in organisational boundaries, in which work that was previously done within manufacturing firms is now outsourced to specialised service providers? This column looks at changes in the US economy over the past 60 years, and shows that the evolution of the input-output structure – which is mostly due to professional and business services outsourcing – accounts for 36% of the increase in services and 25% of the fall in manufacturing.

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Topics:  Global economy Labour markets

Tags:  outsourcing, manufacturing, services, marketing, US, professional and business services

More evidence for technology’s role in the clean-up of manufacturing

Arik Levinson 24 September 2014

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Pollution emitted by manufacturers has been falling for decades in Europe and the US, while the real value of manufacturing output has been growing (Brunel 2014). What accounts for this clean-up? A worrisome explanation is that rich countries have been offshoring the pollution-intensive, or ‘dirty’, parts of their manufacturing sectors, producing the clean goods and doing final assembly at home while importing the dirty goods and resource-intensive intermediate inputs. That’s worrisome for two reasons.

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Topics:  Environment

Tags:  manufacturing, pollution, clean-up, offshoring

Which factors shape the relationship between manufacturing and government wages?

Benedicta Marzinotto, Alessandro Turrini 05 September 2014

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During the crisis, numerous Eurozone countries have introduced public wage freezes or cuts as part of an attempt to contain rising fiscal deficits and debts. Some of these countries also had to rebalance their economies, and improve price competitiveness. The relevant question is therefore whether government wages, whilst relevant for fiscal outcomes, may also exert some impact on private-sector labour costs and price competitiveness.

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Topics:  Labour markets

Tags:  wages, government, public-sector pay, collective bargaining, manufacturing, Public sector, private sector, competitiveness

The US manufacturing recovery: Uptick or renaissance?

Oya Celasun, Gabriel Di Bella, Tim Mahedy, Chris Papageorgiou 24 February 2014

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Amid increasing anecdotes of a ‘renaissance’ in US manufacturing, many commentators have argued that the sector may contribute more significantly to domestic GDP and global industrial output in future (e.g. Financial Times 2012, New York Times 2012, McKinsey Global Institute 2012, Citi Research 2013).

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Topics:  Global economy

Tags:  US, growth, manufacturing, Great Recession

Trade and innovation in services

Leonardo Iacovone, Aaditya Mattoo, Andrés Zahler 15 September 2013

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The literature on innovation and international trade has, until recently, focused almost exclusively on the manufacturing sector. This is not surprising because the bulk of international trade has been in manufactured products and innovation has traditionally been associated with new or improved physical products. The services sector was ignored because it was seen as largely untouched by both trade and innovation.

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Topics:  Development Productivity and Innovation

Tags:  manufacturing, services

Making a future for manufacturing in advanced economies

Richard Dobbs 08 February 2013

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After years of despair about the decline of manufacturing, policymakers in advanced economies now are talking about a rosier future. Wages have risen quickly in coastal China and other offshore locations, and have stagnated or fallen in advanced economies. Severe weather events, such as the Japanese tsunami and Bangkok floods, have exposed the fragility of global supply chains. And news that some US companies will build computers and washing machines once again in North America is offered as proof that the tide has turned (Henion and Schoenherr 2012).

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Topics:  Industrial organisation Productivity and Innovation

Tags:  manufacturing, value added

Spatial disparities in India: Have Mumbai and Chennai become too congested?

Klaus Desmet, Ejaz Ghani, Stephen D O'Connell, Esteban Rossi-Hansberg 13 June 2012

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In the last two decades the Indian economy has been growing at unprecedented rates, but that development has led to widening spatial disparities. While some cities such as Hyderabad have become major high-tech hubs with world-class companies and real estate developments reminiscent of Silicon Valley, many other places remain mired in poverty and stagnation.

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Topics:  Development Industrial organisation Productivity and Innovation

Tags:  India, manufacturing, services, Mumbai, Chennai

Are China and India converging?

Ejaz Ghani 23 January 2012

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Both China and India have attracted global attention for rapid growth, but their growth patterns are very different (Rajan 2006, Pack 2008, Bosworth and Maertens 2010). China took the conventional route of manufacturing-led growth and is recognised as a global leader in manufactured exports. India followed the unconventional route of service-led growth and has acquired a global reputation for service exports. Are their growth patterns converging? Is China catching up in services? Is India catching up in manufacturing? Or has hysteresis kept their growth patterns different?

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Topics:  Development International trade

Tags:  China, India, manufacturing, services

Has production become more fragmented? International vs domestic perspectives

Thibault Fally 10 January 2012

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Production seems more complex and fragmented today than ever before. For instance, airplanes are made of zillions of parts involving many suppliers from various countries (see eg www.newairplane.com). It has also become difficult to keep track of the production of relatively more simple goods such as the Barbie doll (Feenstra 1998) or the iPhone (see Xing 2011 on this site).

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Topics:  International trade

Tags:  US, manufacturing, iPhone

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