U.S. manufacturing and the importance of international trade: it's not what you think

The public often gauges the strength of the U.S. economy by the performance of the manufacturing sector, especially by changes in manufacturing employment. When such employment declines, as has been the trend for many years, it is often assumed to be evidence of the slow death of U.S. manufacturing...

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Bibliographic Details
Published in:Review - Federal Reserve Bank of St. Louis 2013-01, Vol.95 (1), p.27-49
Main Authors: Kliesen, Kevin L, Tatom, John A
Format: Article
Language:English
Subjects:
Economic impact
Economic performance
Employment
Export-import trade
Exports
Forecasts and trends
Foreign direct investment
Growth
Imports
Industrial production
Industry forecasts
International trade
Manufacturing
Manufacturing industry
Productivity
Recessions
Statistics
Trends
U.S.A
United States
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Summary:The public often gauges the strength of the U.S. economy by the performance of the manufacturing sector, especially by changes in manufacturing employment. When such employment declines, as has been the trend for many years, it is often assumed to be evidence of the slow death of U.S. manufacturing and an associated rise in imports. This article outlines key trends in U.S. manufacturing, especially the strong performance of manufacturing output and productivity, and their connection to both exports and imports. The authors use ordinary regression, causality, and cointegration analyses to provide empirical evidence for the positive role of imports in boosting manufacturing output. Policies to bolster exports at the expense of imports would significantly harm U.S. manufacturing. [PUBLICATION ABSTRACT] Reprinted by permission of the Federal Reserve Bank of St. Louis
ISSN:0014-9187
2163-4505
DOI:10.20955/r.95.27-50