Globalization And Structural Change In The US Manufacturing Sector, 1987-2010

This paper investigates the impact of globalization on structural changes in the US manufacturing sector. It finds that US productivity in the manufacturing sector has increased, but that the performance of the sector is highly contingent on changes in US national income. Changes in manufacturing output responds adversely to shocks that are associated with US national income and manufacturing import, but the negative effect of the income shock on US manufacturing dominates and outlasts that of the manufacturing import shock. Empirical evidence also indicates a dual-causal relationship between national income changes and employment changes in the US manufacturing sector.