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Deindustrialization from the Center Perspective: US Trade and Manufacturing in the Last Two Decades

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  • Nikolaos Rodousakis
  • Giuliano Toshiro Yajima
  • George Soklis

Abstract

We argue that the US trade and industry sector has experienced several unsustainable sectoral processes, including (i) a fall in the trade balance in machinery and equipment and high-tech (HT) industries, (ii) a rise in import multipliers in machinery and equipment and HT industries, (iii) a fall in the manufacturing share of GDP in machinery and equipment and HT industries, (iv) a rise in commodities share of GDP, (v) a fall in the wage share, (vi) structural shifts in the consumption share of wages, and (vii) a fall in employment multipliers for the US, particularly in manufacturing. To address these issues, the US must shift toward a more sustainable and value-added economy with a focus on innovation and investment in high-tech industries, renewable energy, and sustainable agriculture. Additionally, policies must be put in place to address the negative impacts of resource extraction and to promote a more equitable distribution of income and wealth.

Suggested Citation

  • Nikolaos Rodousakis & Giuliano Toshiro Yajima & George Soklis, 2024. "Deindustrialization from the Center Perspective: US Trade and Manufacturing in the Last Two Decades," Economics Working Paper Archive wp_1049, Levy Economics Institute.
    • Handle: RePEc:lev:wrkpap:wp_1049
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    References listed on IDEAS

    as
    1. Francesco Bogliacino & Mario Pianta, 2016. "The Pavitt Taxonomy, revisited: patterns of innovation in manufacturing and services," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 33(2), pages 153-180, August.
    2. Ivan Mendieta‐Muñoz & Codrina Rada & Rudi von Arnim, 2021. "The Decline of the US Labor Share Across Sectors," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(3), pages 732-758, September.
    3. Kurz, Heinz D, 1985. "Effective Demand in a "Classical" Model of Value and Distribution: The Multiplier in a Sraffian Framework," The Manchester School of Economic & Social Studies, University of Manchester, vol. 53(2), pages 121-137, June.
    4. Theodore Mariolis, 2008. "Pure Joint Production, Income Distribution, Employment And The Exchange Rate," Metroeconomica, Wiley Blackwell, vol. 59(4), pages 656-665, November.
    5. Alberto Botta & Giuliano Toshiro Yajima & Gabriel Porcile, 2023. "Structural change, productive development, and capital flows: does financial “bonanza” cause premature deindustrialization?," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 32(2), pages 433-473.
    6. Nikolaos Rodousakis & Giuliano Toshiro Yajima & George Soklis, 2024. "The Economic and Environmental Effects of a Green Employer of Last Resort: A Sectoral Multiplier Analysis for the United States," International Journal of Political Economy, Taylor & Francis Journals, vol. 53(1), pages 21-42, January.
    7. Metcalfe, J S & Steedman, Ian, 1981. "Some Long- Run Theory of Employment, Income Distribution and the Exchange Rate," The Manchester School of Economic & Social Studies, University of Manchester, vol. 49(1), pages 1-20, March.
    8. Dani Rodrik, 2016. "Premature deindustrialization," Journal of Economic Growth, Springer, vol. 21(1), pages 1-33, March.
    9. Dosi, Giovanni & Riccio, Federico & Virgillito, Maria Enrica, 2021. "Varieties of deindustrialization and patterns of diversification: why microchips are not potato chips," Structural Change and Economic Dynamics, Elsevier, vol. 57(C), pages 182-202.
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    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution

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