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The Mysterious Disappearance of Productivity Growth in US Manufacturing: Was It the China Shock?

Author

Listed:
  • Robert J. Gordon
  • Kenneth Ryu

Abstract

After registering a 3 percent annual rate from 1948 to 2010, the growth of labor productivity in US manufacturing since 2010 has come to a cold stop, with a zero 2010–2025 annual growth rate. What caused the disappearance of productivity growth in the core of the US economy? We point to the channels by which an invasion of imports, led by China in the 2000–2010 decade, eroded the competitiveness of US producers. Imports competed away sales, closed plants, cut capacity utilization, slashed profits and investment, postponed installation of modern technology, and diverted resources from R&D and innovation.

Suggested Citation

  • Robert J. Gordon & Kenneth Ryu, 2026. "The Mysterious Disappearance of Productivity Growth in US Manufacturing: Was It the China Shock?," AEA Papers and Proceedings, American Economic Association, vol. 116, pages 452-456, May.
    • Handle: RePEc:aea:apandp:v:116:y:2026:p:452-456
    DOI: 10.1257/pandp.20261041
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    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid

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