Before You Bemoan the Decline of American Manufacturing
source: http://community.mises.org/diminishedutility/2011/05/24/before-you-bemoan-the-decline-of-ame...
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- zsignal
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Mark Perry explains:
The chart above shows the incredible increases in U.S. manufacturing productivity, which has made American manufacturing increasingly more efficient and more competitive, leading to lower prices for manufactured goods. Because the productivity gains for manufacturing have exceeded productivity gains for services-producing industries, the prices for manufactured goods have fallen relative to prices for services, which had led to decreases (increases) in manufacturing’s (service’s) share of GDP and employment.
Another great explanation for the decline in manufacturing actually comes from (believe or not) Paul Krugman’s book, Pop Internationalism:
In 1970 US residents spent 46 percent of their outlays on goods (manufacturing, grown or mined) and 54 percent on services and construction. By 1991, the shares were 40.7 and 59.3 percent, respectively, as people began buying comparatively more health care, travel, entertainment, legal services, fast food and so on. It is hardly surprising, given this shift, that manufacturing has become a less important part of the economy.
The chart above shows the incredible increases in U.S. manufacturing productivity, which has made American manufacturing increasingly more efficient and more competitive, leading to lower prices for manufactured goods. Because the productivity gains for manufacturing have exceeded productivity gains for services-producing industries, the prices for manufactured goods have fallen relative to prices for services, which had led to decreases (increases) in manufacturing’s (service’s) share of GDP and employment.
Another great explanation for the decline in manufacturing actually comes from (believe or not) Paul Krugman’s book, Pop Internationalism:
In 1970 US residents spent 46 percent of their outlays on goods (manufacturing, grown or mined) and 54 percent on services and construction. By 1991, the shares were 40.7 and 59.3 percent, respectively, as people began buying comparatively more health care, travel, entertainment, legal services, fast food and so on. It is hardly surprising, given this shift, that manufacturing has become a less important part of the economy.
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- groups:
- Economics
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- tags:
- Economics, Production, Manufacturing
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zsignal
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It's due to the accumulation of capital goods. Often these capital goods exist because new technological advances.
- 1 year ago
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zsignal
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lazloman
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How much of this productivity is actual due to people or technological advances being applied to people?
- 1 year ago
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lazloman
